Amidst the increasing tension in the Middle East, India has got a big relief on the trade front. The export and import figures that have come out for the month of March are looking much better. Due to which the country has got a lot of help in reducing trade deficit. According to the information, India’s merchandise trade deficit declined sharply to $20.98 billion in March, which is much lower than market expectations, as new risks to exports and energy imports increased due to rising tensions related to Iran. Economists polled by Reuters had estimated a deficit of $32.75 billion this month, compared to $27.1 billion in February.
Trade deficit reduced in March
This improvement occurred due to a combination of more exports and less imports. According to government data, merchandise exports increased from $36.61 billion in February to $38.92 billion in March, while imports decreased from $63.71 billion to $59.9 billion. However, the situation is still unclear due to geopolitical tensions in West Asia. The US said its military had blocked maritime trade linked to Iran, while President Donald Trump hinted that talks with Tehran could resume to end the conflict. Unlike export-based economies like Japan, South Korea and Taiwan, India is heavily dependent on the Gulf shipping route, making it more vulnerable to disruptions and cost pressures caused by the ongoing conflict.
Increase in annual export import
Apart from this, Commerce Secretary Rajesh Aggarwal said that India’s total exports of goods and services are estimated to increase by 4.22 percent year-on-year to about $ 860 billion in 2025-26. Services exports remained a key driver, accounting for $418.31 billion during the fiscal year, reflecting India’s growing strength in sectors such as IT, business services and financial services. Meanwhile, merchandise exports grew marginally by 1% to $441.78 billion, reflecting comparatively slower growth in trade in goods compared to the services segment. However, with a continued focus on strengthening domestic manufacturing, improving access to trade finance, and deepening global partnerships, India looks well-positioned to maintain the momentum of its exports in the coming months.
India’s economy is strong
In the post-pandemic era, the country has emerged as one of the fastest-growing major economies, harnessing strong domestic fundamentals to weather global fluctuations. The Economic Survey 2025-26 said India’s growth remains the envy of the world, supported by a strong banking system, good credit flows, substantial foreign exchange reserves and a comfortable current account position. Earlier, IMF had estimated the country’s GDP for the current financial year at 6.5 percent, which is higher than the earlier estimate.
