India's Exports Stay Resilient in FY27 Amid Hormuz Disruptions, Merchandise Trade Up 15%

India’s merchandise exports registered a robust 15% growth between April and May, according to government sources, with non-petroleum exports recording a healthy 10–11% expansion. The performance is particularly noteworthy given the escalating West Asia crisis and the cascading disruption to global supply chains triggered by the blockade of the Strait of Hormuz. India’s trade opened fiscal year 2027 on a strong footing, with overall exports rising 13.6% year-on-year to $80.8 billion in April 2026, even as geopolitical tensions in the Middle East continued to weigh on key trade routes and markets. Goods exports touched a record $43.56 billion during the month, compared with $38.28 billion in April 2025, while services exports climbed to $37.2 billion from $32.8 billion in the same period. Commerce Secretary Rajesh Agrawal attributed the resilience to India’s proactive diversification into new geographies and product segments, stating that the country had effectively cushioned the blow of regional conflict through expanded market access. On the import side, overall inflows rose to $88.6 billion from $82.3 billion a year ago. Goods imports stood at $71.9 billion against $65.4 billion in April 2025, while services imports marginally eased to $16.66 billion from $16.9 billion. Consequently, the merchandise trade deficit widened slightly to $28.4 billion from $27.1 billion in the corresponding month of the previous year. The United States retained its position as India’s top export destination, while China remained the largest source of imports. Senior government officials at the trade data briefing underscored India’s ability to pivot to alternative markets amid ongoing regional uncertainties. Data released by the government reveals that India penetrated 1,821 new product-country export combinations in fiscal 2026, underscoring the breadth of its trade diversification strategy. Traditional sectors — including handlooms and oilseeds — led the push into new markets, while high-value manufacturing categories also posted meaningful international expansion.