India's merchandise trade deficit in March narrowed to $20.76 billion, as compared to $21.69 billion in the same month last year, according to the data released by the Commerce Ministry on Wednesday. The decline is sharper as compared to the preceding month, when it stood at $27.1 billion.
The plunge came as imports and exports cooled due to the slowdown in trade, linked to the escalating tensions in the Middle East. The war between the US-Israel combine and Iran raised insurance premium costs, and nearly blocked the trading route passing through the Strait of Hormuz.
The imports during the month came in at $59.9 billion, marking a decline of 6% as compared to $63.74 billion in March 2025.The cumulative exports slipped by 7.5% to $38.92, as against $42.05 billion in the year-ago period.
India has recorded the highest ever monthly exports figure of $38.92 for the current fiscal year in March 2026, as per commerce secretary Rajesh Agrawal. However, he added that the figure was still lower than $3 billion achieved in March last year.
Exports to the Middle East from India have slumped over 50% in the same month, registering a decline of $3.5 billion. At the same time, imports to India from the region have reduced by 54%, Agrawal highlighted during the briefing.
The on-going Iran conflict has mounted a lot of pressure on trade between India and the Middle East countries impacting a volume of about $3.5 billion. On an average, India's exports to the Middle East went down from $6 billion monthly to $2.5 billion.
Services exports, according to the Commerce Secy remained robust, estimated at $418.3 billion for FY26, 7.9% higher than last year. In March, services exports came in at $35.2 billion, while imports stood at $16.96 billion.
ALSO READ: Indian Official Team To Visit Washington Next Week For Trade Talks
India-US BTA Soon?
India and the United States are set to advance discussions on a proposed Bilateral Trade Agreement (BTA), with fresh negotiations scheduled later this month, even as both sides navigate a shifting tariff and regulatory landscape.
The commerce ministry during a briefing on Wednesday said an Indian delegation is scheduled to visit the US from April 20 to 22 to carry forward BTA negotiations.
The two countries had earlier announced an interim trade deal on Feb. 2, signalling intent to deepen economic ties and address longstanding trade frictions. In a positive move soon after, additional tariffs of 25% on select goods were removed on Feb. 7, offering relief to exporters and improving sentiment among businesses engaged in cross-border trade.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
