India's May exports rise 9.1%; merchandise imports up 7.7% at US$ 61.91 billion

India's merchandise exports increased by 9.1% in May to US$ 38.13 billion compared to the same month last year, driven by higher shipments of engineering goods, commercial vehicles, and smartphones, according to government data released on Friday. Merchandise imports for the same period rose by 7.7% year-on-year to US$ 61.91 billion, resulting in a trade deficit of US$ 23.78 billion. This exceeded economists' expectations, who had predicted a US$ 19.5 billion deficit in a Reuters poll. In April, the trade deficit was US$ 19.1 billion.

Analysts believe merchandise exports, which declined by 3.1% to US$ 437 billion in the previous fiscal year, are likely to improve this year. This optimism is based on an anticipated global trade recovery, government incentives for manufacturing, and decreasing domestic inflation. In May, services exports were estimated at US$ 30.16 billion, with imports at US$ 17.28 billion, compared to US$ 30.33 billion and US$ 16.63 billion respectively in April. India, the third-largest economy in Asia, experienced a better-than-expected growth rate of 7.8% in the January-March quarter, bolstered by a robust manufacturing sector. Economists expect this positive trend to continue throughout the year.

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