Trade deficit narrows to $22 billion as shipments, imports contract

Despite overall decline in merchandise exports, shipments to US grew by 17%

- SHREYA NANDI

Outbound shipments from India saw a 2.17 percent contraction in May to $38.73 billion, mainly due to a fall in global crude oil prices.

Imports contracted 1.6 percent to $60.61 billion in May due to contraction in inbound shipments of petroleum, coal and gold, data released by the commerce department showed. As a result, the trade deficit narrowed considerably to $21.88 billion in the month after widening significantly to $26.42 billion in April. The deficit stood at $22 billion in May 2024.

Despite the overall decline in merchandise exports, shipments to the US grew by nearly 17 percent at $8.83 billion as exporters front-loaded shipments during America's 90-day pause on country-specific reciprocal tariffs. Indian exporters currently bear a 10 percent baseline tariff after the US administration paused the 26 percent reciprocal tariff on India.