Trade Dynamics Shift Amidst Geopolitical Tensions

India's merchandise exports slightly declined by 0.81% in February while the trade deficit narrowed amid geopolitical tensions in West Asia. Imports, particularly of gold and silver, increased significantly. The conflict's impact on logistics is expected to affect future export trends.

India's merchandise exports observed a slight decline of 0.81% for February, with the trade deficit narrowing to $27.1 billion. The recent geopolitical tensions in West Asia are anticipated to influence data in March, mainly due to the joint US-Israel operation against Iran disrupting international freight movement.

Commerce Secretary Rajesh Agarwal indicated a downward trend for March exports due to logistical hurdles arising from geopolitical tensions. Notably, although imports rose by 24.11%, driven predominantly by spikes in gold and silver imports, the overall trade deficit has eased from the previous month's $34.68 billion.

Despite challenges, India has sustained a slight annual growth where exports, for the period from April to February FY26, grew by 1.84% to $402.93 billion. Focus remains on addressing freight concerns and leveraging diplomatic channels to mitigate the impact on trade flows.