India’s Exports Climb 18 pc in May to USD 45.2-bn

The country’s exports climbed up to a six-month high of 18 per cent in May this year to USD 45.2-billion. However, because of an increase in petroleum products’ imports and high crude oil prices, the trade deficit widened to USD 28.21-billion.

Imports expanded ten per cent on a Year-on-Year (YoY) basis to a three-month high of USD 73.41-billion in May, widening the trade deficit from a year-ago.

The country’s Commerce Secretary Mr Rajesh Agrawal said that despite the geo-political uncertainties, India’s exports were clocking a good growth.

The May numbers “are one of the highest monthly export data” he said, adding that going by the trend, this year too looked good for the country’s exports.

The critical export-drivers included electronic goods, engineering items, petroleum products and pharmaceuticals.

During April-May of this fiscal (2026-27), exports moved northward 16.09 per cent to USD 88.91-billion while imports jumped 15.14 per cent to USD 145.35-billion while trade deficit stood at USD 56.44-billion.

An important point to note here is that gold imports during the first two-months of this fiscal year (FY 27) zoomed upward 60 per cent to USD 9.04-billion.

Crude oil imports also clocked an increase—at 16.5 per cent to USD 41.3-billion.

Mr Agrawal said that the country’s exports to West Asia in May of this year has almost reached last May’s numbers despite disruptions in the region.

India’s May Retail Inflation Increases to 3.93 pc

The country’s retail inflation based on the Consumer Price Index (CPI) climbed to 3.93 per cent in May of this year. In April, retail inflation had stood at 3.48 per cent, according to provisional data released by the Ministry of Statistics and Programme Implementation (MoSPI).

The Year-on-Year (YoY) inflation rate for rural areas stood at 4.25 per cent while urban inflation was recorded at 3.53 per cent.

Food inflation, measured by the Consumer Food Price Index (CFPI) increased to 4.78 per cent in May of this year from 4.2 per cent in the previous month of April.

Rural food inflation was recorded at 4.85 per cent while urban food inflation stood at 4.66 per cent. The combined CFPI index was 105.35 during the month.

Among major categories, inflation in food and beverages stood at 4.55 per cent while restaurants and accommodation services clocked a 5.75 per cent inflation.

Personal care, social protection and miscellaneous goods and services registered the highest inflation among divisions at 18.46 per cent. Education services recorded an inflation of 2.99 per cent while health inflation stood at 1.49 per cent.

Housing inflation for May was estimated at 2.12 per cent. The corresponding rates were 2.73 per cent in rural areas and 1.91 per cent in urban areas.

Silver jewellery recorded the highest inflation among the key items at 155.23 per cent in May. It was followed by tomato at 48.43 per cent, gold, diamond and platinum jewellery at 40.93 per cent, ginger at 32.49 per cent and raisins and monacca at 21.97 per cent.

Prices of potato and peas both continued to remain in negative territory with their respective inflation at -23.71 per cent and -11.47 per cent. Other items registering a negative inflation included motor cars and jeeps, cumin (jeera) and motor-cycles and scooters.

According to the National Statistical Office (NSO), the price data for the index was collected from 1,407 urban markets, including on-line markets and 1,465 villages across the country.

Auto Industry Registers Best-Ever May Sales

Sales of cars, two-wheelers and three-wheelers all hit new highs in May of this year as the country’s automobile industry recorded its best-ever domestic sales performance for the month.

Passenger vehicles (PVs), two-wheelers and three-wheelers all registered their highest sales volumes for the month, stated industry body the Society of Indian Automobile Manufacturers (SIAM).

Domestic passenger vehicles’ sales stood at 4,38,854 units in May 2026, marking a 27.3 per cent Year-on-Year (YoY) increase over 3,44,656 units sold in the corresponding month of last year. The point to be highlighted here is that this was the highest-ever passenger vehicles sales clocked in the month of May.

Apart from PVs, two-wheelers also registered their strongest May performance on record with domestic sales increasing 14.8 per cent YoY to 19,02,209 units as compared to 16,57,116 units in May of last year.

Within this segment, sales of scooters and motor-cycles both expanded healthily—scooter sales zooming by 27.4 per cent YoY while motor-cycles sales grew 7.2 per cent YoY.

In terms of numbers, scooter sales rose to 7,39,667 units while motor-cycle sales moved up to 11,13,973 units.

Moped sales also clocked a significant 30.3 per cent YoY growth to 48,569 units.

The three-wheeler segment continued its healthy growth trajectory as domestic sales expanded 31.1 per cent on a YoY basis to 70,720 units from 53,942 units a year earlier.

Goods carriers clocked a significant 35.3 per cent expansion YoY to 11,802 units while e-rickshaw sales climbed 38.9 per cent on a YoY basis to 1,000 units. E-carts grew 81.8 per cent YoY to 269 units.

The important point to note here is that this sales performance is very creditable indeed given the increase in vehicle running costs during the month.

The overall production of PVs, two-wheelers and three-wheelers as well as quadricycles stood at 29,27,211 units, during May 2026, reflecting strong manufacturing activity across the industry.

Here, the point to note is that the record May performance was aided by higher consumer demand following the reduction in GST rates in September 2025. Easier financing availability has also helped improve vehicle affordability and supported retail demand across urban and rural markets.

India-UK FTA Could Help India Win in UK Market

The implementation of the India-UK Free Trade Agreement (FTA) from next month (July 15) has the potential to rewrite trade dynamics with Pakistan and Bangladesh looking most vulnerable to losing market-share in the UK market.

The agreement is expected to beef-up India’s competitiveness in such key labour-intensive segments as textiles, apparel, footwear and leather products, areas where Bangladesh and Pakistan have traditionally enjoyed an advantage.

The agreement between the two countries is projected to increase bilateral trade by 25.5-billion Pounds in the long-term while providing extensive tariff reductions across a wide range of goods.

Under the pact, the UK will lower or remove duties on several Indian exports such as clothing and footwear, thereby increasing the attractiveness of Indian products to British importers. It is expected that the most immediate impact will be felt in the apparel sector.

According to textile manufacturers, Indian manufacturers have for long been confronted with a tariff disadvantage compared to competitors such as Bangladesh.

What needs highlighting here is that the FTA eliminates much of this handicap, thereby helping Indian companies compete more aggressively in the UK market.

It also ignites the possibility of fresh investment flowing into the country’s textile industry and generating employment as export orders shift towards Indian suppliers.

Bangladesh relies heavily on preferential access and low-cost manufacturing to maintain its position in the UK market. India’s neighbour Pakistan also enjoys a significant export presence in textiles and apparel.

An important point that requires highlighting here is beyond the textile sector, the FTA is also expected to strengthen the country’s position in engineering goods, footwear, chemicals and other export-oriented segments.