NEW DELHI: India’s trade deficit narrowed to a three-month low in May, helped by lower gold imports, bolstering the outlook for its current account balance. But in a worrying sign, weak global demand as well as persistent domestic bottlenecks led to a sixth straight annual fall in merchandise exports. Exports account for about a fifth of India’s $2 trillion economy. The trade deficit shrank to $10.41 billion last month, its lowest since February, from $10.99 billion in April, data released by the trade ministry showed today. The data comes days after India’s current account deficit, the broadest measure of its trade with the rest of the world, narrowed to a one-year-low of 0.2 per cent of gross domestic product in the January to March quarter. Economists at Barclays said an improvement in the trade shortfall will help keep the current account gap in check in the April to June quarter. “Overall, we think India’s external sector is on a strong footing and will remain so in the coming quarters,” Barclays said in a note. India is reaping the benefits of a slump in global commodity prices that helped reduce gold imports by nearly 23 per cent from April to $2.4 billion last month. The slump also brought down the cost of crude imports, which account for nearly a third of India’s total imports, by about 41 per cent in May from a year earlier to $8.5 billion. But in a sign of a pick-up in oil demand, imports jumped 15 per cent from April.