India's trade deficit for May 2025 narrowed to $21.88 billion from a five-month high of $26.42 billion in April, which is also lower than the year ago figure of $22.09 billion, according to the Commerce Ministry's report on June 16.

Merchandise exports fell 2.2 percent on-year to $38.73 billion in May, along with a drop of 1.76 percent in imports at $60.61 billion, as per provisional data released.

The trade deficit improved even as the global trade setup remains under the strain of US President Trump's Liberation Day tariffs, amid ongoing talks to thrash out a trade deal with US along with EU and others key trading partners.

Sectors that have done well include electronic goods exports, inorganic and organic chemicals, pharma, ready-made garments, Commerce Secretary Sunil Barthwal said. He added that India will continue with the policy of focusing on six key sectors that make up 75 percent of global imports.

"In terms of strategy, we are focusing on certain countries which represent more than 65% of the global imports and are also exploring new markets," Barthwal added.

Barthwal said India is doing 'much better than the global average', when one looks at the global picture and the forecast by the WTO. Significantly, India's non-petroleum merchandise exports have seen a positive growth in May, led by electronic goods, chemicals, and garments.

This is being updated.