India’s exports rise, deficit hits 9-month low amid global tensions
India’s merchandise trade deficit narrowed unexpectedly in March, helped by a surge in exports to the United States that offset disruptions caused by the ongoing Iran conflict.
Data released by the Ministry of Commerce and Industry showed the deficit fell to a nine-month low of $20.67 billion. Exports rose to $38.92 billion from $36.61 billion in February, while imports declined to $59.59 billion from $63.71 billion.
US demand boosts exports
Exports to the US jumped 17.4% month-on-month to $8.02 billion, supported by tariff cuts following a ruling by the US Supreme Court.
The reduction in tariffs helped boost shipments of textiles and engineering goods to India’s largest export market.
Iran conflict disrupts trade routes
Despite the export gains, ongoing tensions around the Strait of Hormuz continue to disrupt global shipping.
The key route, which handles a significant share of global oil and trade flows, has faced prolonged disruptions, leading to higher freight and insurance costs and delays for exporters.
“Exports to the Middle East in March dropped by $3.5 billion… this has impacted goods exports in the month,” Trade Secretary Rajesh Agrawal said.
Imports decline amid volatility
Imports of crude oil and related products fell sharply by nearly 36% year-on-year to $12.18 billion, while gold imports declined 31.6% to $3.06 billion.
India, the world’s third-largest oil consumer, relies heavily on imports, with over 80% of crude oil sourced from abroad.
Services trade remains strong
India’s services sector continued to provide support, with estimated exports at $35.20 billion and imports at $16.96 billion, resulting in a surplus of $18.24 billion.
Trade outlook shaped by opposing forces
The latest data highlights contrasting trends—strong US demand supporting exports, while geopolitical tensions weigh on supply chains and costs.
Economists had expected the deficit to widen to $32.75 billion, making the narrower gap a positive surprise.
India-US trade talks resume
India is also looking to strengthen trade ties with the US, with officials set to resume in-person negotiations later this month.
An interim trade deal is under discussion, aimed at improving market access and reducing tariffs.
Annual trade picture
For the financial year ended March, India’s total goods and services exports rose 4.22% to $860.09 billion, while imports increased 6.36% to $978.40 billion, widening the overall trade deficit.
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