India’s merchandise trade deficit unexpectedly narrowed in March to a nine‑month low of $20.67 billion as exports rose and imports fell, helped in part by a sharp increase in shipments to the United States even as the ongoing conflict involving Iran disrupted shipping routes and pushed up energy and logistics costs. Data from the commerce ministry show exports rose to $38.92 billion in March from $36.61 billion in February, while imports fell to $59.59 billion from $63.71 billion.
Exports to the US climbed 17.4% month‑on‑month to $8.02 billion, supported by a reduction in US tariffs to 10% after a recent US Supreme Court ruling. That change boosted shipments of textiles and engineering goods to India’s largest export market, where duties had at times reached as high as 50%.
The trade figures highlight opposing forces shaping India’s external sector: a partial revival in US demand on one hand and supply disruptions and sharply higher freight and insurance costs on the other. Exporters warned of severe delays near the Strait of Hormuz, a critical shipping lane that has been largely obstructed for about six weeks, raising transit times and costs.
“Exports to the Middle East in March dropped by $3.5 billion… this has impacted goods exports in the month,” Rajesh Agrawal, India’s trade secretary, told reporters in New Delhi, pointing to the war’s regional impact. India, the world’s third‑largest oil consumer, imports more than 80% of its crude oil needs and roughly 60% of its cooking gas, with the Middle East supplying a large share.
Imports of crude oil and related products fell nearly 36% year‑on‑year to $12.18 billion in March, while gold imports declined 31.6% to $3.06 billion. Economists polled by Reuters had expected the overall goods deficit to widen to $32.75 billion in March, compared with a $27.1 billion shortfall in February.
On services, India estimates exports at $35.20 billion and imports at $16.96 billion in March, producing a services surplus of about $18.24 billion, Reuters calculations show. Separately, New Delhi is working to finalise an interim trade framework with Washington in the coming months; an Indian negotiating team is scheduled to visit the US from April 20 to resume in‑person talks after several months of virtual engagement.
For the fiscal year ended March, combined goods and services exports rose 4.22% to $860.09 billion while imports grew 6.36% to $978.40 billion, widening the overall trade deficit to $119.3 billion from $94.66 billion a year earlier.
Original Source: https://www.ndtv.com/india-news/indias-trade-gap-shrinks-as-rise-in-exports-to-us-offsets-iran-war-hit-11364333#publisher=newsstand
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Publish Date: 2026-04-16 09:52:00
