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India's Trade Deficit Shrinks Amidst West Asia Conflict Disruptions
16 Apr
Summary
- India's trade deficit narrowed in March due to disruptions from the West Asia conflict.
- Exports fell 7.44% and imports declined 6.5% in March, impacting trade figures.
- Despite challenges, India achieved record overall exports of $860 billion in FY26.
India's trade deficit narrowed to $20.67 billion in March, a slight decrease from the previous year, as the ongoing West Asia conflict disrupted trade flows. Both merchandise exports and imports experienced a decline during the month.
Exports fell by 7.44% to $38.92 billion, while imports decreased by 6.5% to $59.59 billion in March. This period marked the initial impact of the conflict that began on February 28.
Despite these disruptions, India achieved a record $860 billion in total exports for fiscal year 2026, demonstrating significant resilience. This achievement was noted as particularly impressive given global economic headwinds and supply chain challenges.
Commerce Secretary Rajesh Agrawal highlighted that exports and imports to West Asia were halved in March, with logistical challenges expected to persist into April.
Engineering goods exports reached an all-time high of $122.43 billion in FY26. Services exports are also showing strong growth and may soon surpass merchandise exports.
Looking ahead, India anticipates new trade agreements to come into effect, including FTAs with the UK, Oman, and New Zealand, and progress on the India-EU FTA in calendar year 2026.
