Code Over Cargo? Services Surge Keeps India’s Export Dreams on Track In May

May 2025 showcased a tale of two different trends of India's exports. While merchandise exports slipped marginally, services exports continued their robust upward trajectory, helping to lift overall outbound trade.

According to data released by the Union Commerce Ministry, merchandise exports dropped to $38.73 billion in May 2025, down from $39.59 billion in the same month last year. The minuscule decline reflects global headwinds and demand fluctuations across key product categories, including engineering goods, textiles, and chemicals.

In sharp contrast, services exports surged to $32.39 billion, up from $29.61 billion in May 2024—underscoring the resilience of India’s Iinformation, consulting, financial, and business service sectors, as per the data by Union commerce ministry. This segment has emerged as a bright spot, effectively offsetting the softness in goods trade.

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Total exports up

Overall exports—merchandise and services combined—rose by 2.77% year-on-year, reaching $71.12 billion in May 2025. Thge company's total exports stood at $69.2 billion during May 2024.The performance highlights the rising prominence of India’s services sector in stabilizing the country’s external trade position.

Trade deficit declines

The services-led growth also helped narrow the trade deficit, which came down to $6.62 billion, from $9.35 billion in May last year. Imports during the month totaled $77.75 billion, slightly lower than the $78.55 billion recorded a year earlier.

Exports surge during this fiscal 

In the first two months of the fiscal year 2025-26 (April–May), total exports reached $142.43 billion, up 5.75% year-on-year. Imports during the same period rose to $157.57 billion, registering a 6.52% increase from $149.81 billion last year.

The cumulative trade deficit for April-May widened slightly to $17.14 billion, compared to $15.12 billion in the same period of 2024-25.

Government initiatives such as the Production Linked Incentive (PLI) scheme across multiple sectors such as electronics, are credited with boosting exports. The scheme aims to make Indian manufacturers globally competitive, attract investments, reduce import dependency, and strengthen India’s integration into global value chains.