India's trade deficit narrowed to $21.88 billion in May from $26.43 billion in April, according to data from the Ministry of Commerce and Industry. The decrease came as imports fell by 1.7% year on year.
The gap between imports and exports was lower than the estimated deficit of $25 billion. Forecasts from 21 economists tracked by Bloomberg had projected the deficit to be between $28.8 billion and $20 billion. The trade deficit had widened to $26.41 billion in April.
Merchandise exports declined by 2.2% to $38.73 billion in May compared to $39.59 billion in the same month last year. Imports decreased to $60.61 billion from $61.68 billion during the same period.
For the fiscal year so far, merchandise exports rose 0.6%, while imports fell 6.6% from the same period an year ago.
In the services sector, exports were recorded at $32.29 billion, while imports stood at $17.14 billion.
According to commerce secretary Sunil Barthwal, India has done extremely well despite global policy uncertainties regarding trade and conflicts, clocking positive export growth in the first two months of the ongoing fiscal.
He further added that India is doing much better than global forecast shared by WTO and has raised its share in global exports. Additionally, the ministry is monitoring ongoing conflicts and looking into issues being faced by exporters.
According to Barthwal, the current fall in oil prices has had some dampening impact on exports.
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