A steep decline in the domestic currency of over 10% during the last 12 months and a partial recovery in exports to the West Asia region have helped Indian goods exports report a sharp 18% jump in goods exports during May compared to last year, a 6-month high, trade data released by the Commerce and Industry on Monday showed.

According to the data, the country’s trade deficit also swelled to $28.21 billion in May, up from $22.56 billion last year, as goods exports surged by 18% to $45.2 billion from $38.3 billion in May 2025, while imports also jumped by 20.62% to $73.41 billion.

Commerce Secretary Rajesh Agarwal, at a press briefing, said many of India’s trade problems will be Commerce Secretary Rajesh Agarwal, at a press briefing, said many of India’s trade problems will be alleviated if the peace deal between the US and Iran stands, adding that the exports to West Asia in May this year have almost reached the level of last May despite disruptions in that region.

Trade data also showed that imports from the US registered a strong 54.43% in May to $5.87 billion as India stepped up energy imports amid the war in West Asia. However, exports to India’s largest market went up by less than 1%.

Official data showed that key drivers of exports include electronic goods, up 11.62% to $5.09 billion and petroleum products, up 54.89% to $8.42 billion. However, exports of tea, tobacco, spices, cashew, marine products, leather and textiles recorded negative growth in May.

Gold imports during the first two months of this fiscal year surged 60% to $9.04 billion. Oil imports in May rose 53.8% to $22.67 billion due to high prices, which hovered at around $100 per barrel in that month. These imports rose 16.5% to $41.3 billion during April-May 2026-27.

Kirit Bhansali, Chairman, Gem and Jewellery Export Promotion Council (GJEPC) said studded gold jewellery exports grew 6.71% year-on-year (y-o-y) to $964.02 million during April-May 2026, compared to $903.37 million in the corresponding period last year.

“However, the main concern remains plain gold jewellery exports, which declined sharply by 40.11% y-o-y to $ 635.95 million during April-May 2026 from $1.06 billion in the corresponding period last year. One of the key reasons for this decline has been the tightening of gold imports, which has affected the availability of gold for export manufacturing. We have taken up this matter with the government and are hopeful of a positive resolution,” Bhansali said.

Federation of Indian Export Organisations (FIEO) President SC Ralhan said the recent diplomatic breakthrough in West Asia is expected to improve the movement of goods, stabilise freight and insurance costs, and enhance predictability in international trade flows.

Pankaj Chadha, Chairman of the Engineering Exports Promotion Council (EEPC), said India’s engineering sector has successfully navigated through a very challenging period and has maintained positive growth in exports in May this year.

The value of total engineering shipments stood at $12.31 billion in May 2026, up 24.48% over $ 9.89 billion in May 2025. Cumulatively, engineering exports during the April-May period of FY27 stood at $22.66 billion, a growth of 16.8% over $19.40 billion in the corresponding period last year, he said.

“Several challenges remain even as a peace deal between the US and Iran has been announced. It is expected that it will take time for the deal to bear fruit, considering the widespread disruption in the energy market and its ripple effect down the line,” Chadha said.