India’s Trade Performance in May: Services Surplus Rises While Merchandise Deficit Narrows

Image Source : The Economic Times

India’s trade figures for May indicate a mixed trend, with a notable surplus in services trade and a narrowing merchandise trade deficit. According to Reuters calculations, India recorded a *services trade surplus of 14.65 billion dollars, while the merchandise trade deficit stood at **21.88 billion dollars, lower than the projected **25 billion dollars*.

Key Trade Figures for May

- Merchandise imports totaled *60.61 billion dollars*, reflecting steady demand for foreign goods
- Merchandise exports reached *38.73 billion dollars*, highlighting India’s continued push for global trade expansion
- The services trade surplus of *14.65 billion dollars* underscores the strength of India’s IT, financial, and consulting sectors
- The merchandise trade deficit of *21.88 billion dollars* was lower than market expectations, suggesting improved export competitiveness

Market Implications and Economic Outlook

India’s trade performance in May reflects resilience in the services sector, which continues to generate substantial foreign exchange earnings. The narrowing merchandise trade deficit indicates a balanced approach to imports and exports, potentially easing pressure on the current account.

Future Prospects

With global trade dynamics evolving, India’s ability to sustain export growth while managing imports will be crucial in maintaining economic stability. Policymakers will likely focus on trade agreements and incentives to further strengthen India’s position in international markets.

Sources: Reuters, Trade Ministry, Economic Times.