India’s trade deficit shrinks
India’s merchandise trade deficit narrowed sharply to $20.67 billion in March, official data has shown. A Reuters poll of economists had projected a deficit of $32.75 billion for the month.
The March figure is also well below the $27.1 billion in merchandise trade deficit recorded in February.
The marginal improvement was spurred by a combination of higher exports and softer imports amid the Middle East crisis.
New Delhi’s merchandise exports rose to $38.92 billion in March from $36.61 billion in February, according to government data.
Imports declined to $59.9 billion from $63.71 billion a month ago.
India’s total exports (merchandise & services) are estimated to reach a new record high of US$ 860.09 Billion in FY 2025–26. Merchandise exports stood at US$ 441.78 Billion, reflecting steady growth. Notably, March 2026 recorded the highest monthly merchandise exports of the year… pic.twitter.com/aGsG2wLqVZ
— Dept of Commerce, GoI (@DoC_GoI) April 15, 2026
The outlook remains challenging as the South Asian nation depends on Gulf shipping routes, exposing it to supply disruptions and cost escalations arising from the geopolitical tensions in the Middle East.
The US said its military had halted maritime trade linked to Iran on Wednesday, though President Donald Trump has claimed he is “permanently opening” the Strait of Hormuz, offering confusing signals on the shape of the conflict.
India’s combined exports of goods and services are estimated to have risen 4.22% year-on-year to around $860 billion in 2025-26, Commerce Secretary Rajesh Agrawal said on Tuesday.
New Delhi’s services exports in the fiscal year were pegged at $418.31 billion, and merchandise exports were estimated at $441.78 billion.
India’s trade surplus with the US narrowed to $34.4 billion in fiscal year 2026 from $43 billion a year ago. Exports to the US rose 1% to $87 billion, while imports from the country jumped 16% to $53 billion.
India and the US are in advanced talks to convert a February 26 joint statement into a bilateral trade deal, Commerce Secretary Rajesh Agrawal said in a post on X.
He added that New Delhi and Washington are finalizing mutual concessions, and meetings are scheduled from April 20 to work toward the structure and timelines of a trade deal.
China became India’s largest trading partner in the 2025-26 financial year, overtaking the US, Beijing’s embassy in New Delhi said earlier this month.
Washington was New Delhi’s largest trading partner for four years in a row until 2024-25.
