India's Trade Deficit Hits Five-Month High At $22 Billion, Exports Decline To $35 Billion

India's trade deficit widened in May, reaching a five-month high of $22 billion, according to recent government data. Simultaneously, the country's exports experienced a decline of 10%, totaling $35 billion during the same period.

The overall trade deficit has decreased to $10.35 billion in May 2023, from $12.20 billion the previous year. Exports have now declined for the fourth month in a row due to a slowdown in global demand, after falling 12.7 percent in April, according to government data.

According to the report, service exports were $25.30 billion, while imports totaled $13.53 billion. Imports in this category fell to $13.53 billion, down about 11% from the $15.20 billion reported in May 2022.

"Trade deficit has come down substantially. Total trade deficit decreased by 35.41 percent for April and May," Commerce Secretary Sunil Bharatwal said.

He also stated that the Departments of Commerce and Promotion of Industry and Internal Trade are developing an export plan with a focus on 40 nations.

The trade gap emphasises the obstacles for a certain economy, in this case India, which is striving to recover from epidemic and global economic fears. A larger trade deficit poses a risk to the current account deficit, which can damage investor mood and undermine the local currency's appeal. India's exports have increased from $500 billion to $767 billion in 2022-23 in the last two years.