FX.co ★ India’s Trade Deficit Smaller than Expected in March

India’s trade deficit narrowed to $20.67 billion in March 2026, down from $27.1 billion in February and $21.69 billion in the same month a year earlier. This reading came in well below market expectations of $32.75 billion and marked the smallest trade gap since June 2025. The improvement was driven by a rise in exports to $38.92 billion, up from $36.61 billion in February, alongside a decline in imports to $59.59 billion from $63.71 billion. Nevertheless, the outlook remains uncertain amid escalating geopolitical tensions in West Asia. The US military has recently suspended maritime trade linked to Iran, though President Donald Trump has indicated that negotiations with Tehran could resume. Unlike export-driven economies such as Japan, South Korea, and Taiwan, India’s heavy reliance on Gulf shipping routes leaves it particularly exposed to disruptions and higher costs stemming from the ongoing conflict.