India’s exports, imports fall sharply in March; trade deficit narrows

Iran conflict drags down shipments to West Asia by over 50 per cent.

New Delhi: India’s trade deficit narrowed to 20.67 billion dollars in March from 21.69 billion dollars recorded in the same month last year as the West Asia conflict hit the country’s both inbound and outbound shipments, as per official data released on Wednesday.

India’s exports fell to 38.92 billion dollars in March from 42.05 billion dollars recorded in the same month last year, posting a decline of 7.44 per cent while imports dropped by 6.51 per cent to 59.59 billion dollars.

For the full year FY26 merchandise exports stood at 441.8 billion dollars, which is 0.9 per cent higher than the previous year.

Imports rose at a faster pace of 7.5 per cent to 775 billion dollars in the year ended March 31. This led to near record increase in trade deficit.

The overall trade deficit for FY26 widened to 119.3 billion dollars from 94.7 billion dollars in the previous year. The highest-ever annual trade deficit was recorded at 121.62 billion dollars in 2022-23.

Commerce Secretary Rajesh Agrawal said the increase in trade deficit during FY26 was largely due to the surge in gold and silver prices.

The value of gold import jumped to 71.98 billion dollars in FY26 from 58.01 billion dollars in the previous year, recording an increase of 24 per cent; while silver import nearly tripled from 4.83 billion dollars in FY25 to 12.05 billion dollars in FY26.

India’s overall exports, merchandise and services combined, rose to 860.09 billion dollars in 2025-26, which is 4.22 per cent higher over the previous year. Overall imports jumped by 6.47 per cent to 979.40 billion dollars.

The US-Israel-Iran conflict, which began on February 28, badly impacted India’s shipments to the Gulf region. India’s exports to West Asia dipped by 57.95 per cent in March while imports from the region fell 51.64 per cent.

“Crossing 860 billion dollars in exports is a notable achievement, particularly amid global uncertainties, supply chain disruptions, and fluctuating demand. It highlights the adaptability and strength of Indian exporters,” said S C Ralhan, President, Federation of Indian Export Organisations (FIEO).

Electronics, engineering goods, pharmaceuticals, petroleum, marine and food products were among the key drivers of India’s outbound shipments in 2025-26. Electronics goods export increased by 24.4 per cent followed by a 21.9 per cent surge in meat, dairy, & poultry products during the year.

“The FY26 was marked by geopolitical tensions, a shift in trade policy by the Trump administration, and logistical challenges, among others. The engineering community, while dealing with these issues, also identified new opportunities and went into the market as well as product diversification,” said Pankaj Chadha, Chairman, EEPC India.

Engineering goods exports rose by 4.86 per cent to hit an all-time high of 122.43 billion dollars in the financial year 2025-26.

Top 20 countries contributed 67.5 per cent of overall exports and 77.9 per cent of overall imports. China exhibited 36 per cent growth in exports and 16 per cent in imports. Exports to the US remained flat.