May'25

• India's Merchandise Exports Rise by 9% in May; Trade Deficit Widens

In May 2025, India’s merchandise exports grew 9.03% year on year to $38.49 billion from $35.30 billion in April 2024. Engineering, petroleum and electronics goods were the star performers. 

Imports rose 19.12% to $64.91 billion in May 2025 from $54.49 billion in May 2024. This has resulted to a trade deficit of $26.42 billion in April 2025, the highest since November 2024. The widening trade deficit is due to the increase in import bills, particularly in crude oil and electronics which is putting pressure on the current account.

• US inflation steady, Fed stays cautious

In the US, inflation was not as high in April with the core Personal Consumption Expenditures or the PCE price index rising only 0.1% from the previous month. Consumer spending also grew modestly by 0.2 percent in April, signalling that demand in the US is holding steady but not overheating.

Despite the favourable numbers, the Federal Reserve is maintaining a cautious stance. At its meeting on May 7, it kept interest rates unchanged at 5.25 to 5.5 percent. Policymakers noted that any unexpected rise in prices or a sudden weakening of the labor market could force a reassessment of the current monetary policy. With global tariff tensions easing, the Fed emphasised that future decisions would depend heavily on fresh data. As revealed in the minutes of the meeting, it showed concerns about the inflation and unemployment risks in the coming months. 

• China's recovery shows signs of Fatigue 

China’s latest economic data painted a mixed picture, indicating that the country’s post-pandemic recovery might be losing the steam that it once showed. Industrial output in April rose 6.1 percent year-on-year, slightly above expectations but down from 7.7 percent in March. Retail sales grew by 5.1 percent in April, compared to 5.9 percent the month before, missing analysts’ forecasts. Moreover, fixed-asset investment grew only to 4% in January to April, meaning corporations and local governments are being cautious in new projects. These numbers indicate that the domestic demand in China is soft and momentum is fading after a substantially strong start of the year.

• Mixed Performance in Banking Sector During Q4 FY25

The banking sector in India had a mixed bag in the fourth quarter of FY25. Leading private banks like HDFC Bank and ICICI Bank reported a decent to good growth; HDFC Bank’s net profit rose 6.7% year-on-year to a huge sum of ₹17,616 crore and ICICI Bank’s 18% to a staggering ₹12,630 crore. Axis Bank’s profit was flat year-on-year at ₹7,117 crore. Mid-sized and public sector banks outperformed expectations, with Indian Bank reporting 32% growth in net profit for Q4 FY25.This divergence shows the varying dynamics in the banking industry where smaller aned public sector banks are gaining momentum, maybe due to better asset quality and strategic operational adjustments or just by offering better interest rates to their customers and dividend to their shareholders.

• HealthTech and Logistics Drive Startup Funding Past $1 Billion in May

After a 35% decline in startup funding in April, the Indian startup ecosystem has seen a strong comeback in May 2025 with total funding crossing the billion dollar mark. This resurgence was primarily led by two significant deals in health and logistics. PB Healthcare Services raised ₹1,867 crore (approx. $215 million), in an extended seed round and logistics firm ‘Porter’ raised $200 million.Overall, Indian startups raised $1.14 billion across 98 deals in May, indicating some renewed investor interest and confidence in sectors that are expected to have substantial growth.