India exports fall 7.44% in March; imports dip as trade deficit narrows to USD 20.67 billion

India’s exports recorded the sharpest fall in five months in March. Official data released on Wednesday showed a 7.44 per cent drop to USD 38.92 billion. The fall came amid trade uncertainty and geopolitical tensions. Shipments to West Asia also fell sharply during the month.

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Even with weaker exports, the trade deficit improved in March. It narrowed to a nine-month low of USD 20.67 billion due to softer imports. Imports declined 6.51 per cent to USD 59.59 billion. The fall was linked to lower inbound shipments of crude oil and gold.

India exports fall and West Asia trade hit

Commerce Secretary Rajesh Agrawal said the Middle East region drove much of the decline. India’s exports to the Middle East region fell by 57.95 per cent in March. Imports from the Gulf nations fell by 51.64 per cent. "Our exports to the Middle East in March dipped by 3.5 billion dollars USD and it has impacted overall exports,\" Agrawal told reporters.

Agrawal linked the disruption to the conflict affecting shipping lanes. The war in the Middle East has disrupted the flow of oil and gas through the Strait of Hormuz. Freight and insurance costs have risen for exporters. Agrawal said April could also be difficult due to hampered ship movements in international waters.

India exports data shows crude oil and gold shifts

The latest figures showed steep declines in key import items in March. Crude oil imports fell 35.91 per cent to USD 12.18 billion. Gold imports dropped 31.63 per cent to USD 3.06 billion. For 2025-26, crude oil imports declined 6.37 per cent to USD 174 billion. Gold imports rose 24 per cent to USD 71.97 billion.

For the full 2025-26 fiscal year, exports increased 0.93 per cent to a record USD 441.78 billion. Imports rose 7.45 per cent to USD 775 billion. The trade deficit expanded to USD 333.2 billion. The data attributed the wider gap to higher gold and silver imports.

India exports and services exports reach new high

Agrawal said total goods and services exports rose to a new peak. The estimate showed a 4.22 per cent increase to USD 860.09 billion in 2025-26. The previous year was USD 825.26 billion. Agrawal said services exports stayed strong. Agrawal added that exporters posted growth despite global challenges.

Agrawal also offered a cautious outlook on trade conditions. \"We are hopeful that 2026-27 will be a much better year,\" he said. \"We hope the challenges that we face today will not sustain for long, and we may have smoother trades across the world in months to come,\" the secretary said.

India exports and China trade replaces US lead

Government data showed China became India’s largest trading partner in 2025-26. Bilateral trade reached USD 151.1 billion during the year. India’s trade deficit with Beijing widened to USD 112.16 billion. The US had held the top position for four straight years till 2024-25.

Trade with the US showed mixed trends in 2025-26. Exports to the US grew 0.92 per cent to USD 87.3 billion. Imports from the US rose 15.95 per cent to USD 52.9 billion. The trade surplus fell to USD 34.4 billion from USD 40.89 billion in 2024-25. Agrawal said energy imports from the US, including LPG, have increased.

Agrawal said new free trade agreements could support exporters in the near term. Free trade agreements that India will implement this year will provide opportunities for domestic exporters. The India-UK trade pact is expected to come into force from May. The trade deal with Oman may be implemented in June.

With inputs from PTI