West Asia war: India’s trade with region down, pulls down exports in March 2026

India’s exports to West Asia declined by 57.95% in March 2026, pulling down overall exports for the month.  Briefing reporters about India’s foreign trade performance, Commerce Secretary Rajesh Agarwal said one of the challenges on the trade front in March was the West Asia crisis.

India’s exports to the region dipped by $3.5 billion in the month of March 2026. Imports from the region fell also 51.64% during the same period or of $8.7 billion. “We run a net trade deficit with West Asia due to high energy imports,” he said. March was the first month of the war in West Asia.

He further said that the government’s approach to the challenge has been to remain connected with all stakeholders and resolve any operational issues that come up. Underlining the logistical challenges in the region as many ports are not accessible, he said that the conflict will have an impact going forward in April as well and India will also get impacted. “Because of the logistical challenges, April will also be a tough month."

However, he underlined that the export industry is quick to adapt and pointed that there is a recalibration of supply chains happening globally.

In March 2026, India’s goods exports fell 7.44% year-on-year to $38.92 billion from 42.05 billion in March 2025. Imports also fell 6.51% to $59.59 billion from $63.75 billion in March 2025 due to tensions from the blockade of the Strait of Hormuz. The trade deficit was $20.67 billion in the month.

Overall, in FY26, India’s cumulative exports of merchandise and services grew 4.22% to $ 860.09 billion, as compared to $ 825.26 billion in FY25. The cumulative value of merchandise exports in FY26 was $ 441.78 billion, as compared to $ 437.70 billion in FY25, registering a growth of 0.93%. Imports meanwhile rose by 7.45% year on year in FY26 to $ 774.98 billion, with officials attributing this to the spike in gold and silver prices. For FY26, India’s trade deficit widened to 333.2 billion.

The Commerce Secretary however, highlighted that goods exports managed to rise marginally even in a year that saw several challenges including the reciprocal tariffs by the US and the West Asia war. He also expressed hope that FY27 will be much better for India with smoother trade and said that several of India’s free trade agreements are likely to be operationalised this fiscal, helping boost prospects.

India’s free trade agreement with Oman is likely to be signed on April 27 and will come into force from October this year. Meanwhile, India’s free trade agreement with the UK is likely to come into force from May and that with Oman is expected to come into effect from June.

India is also working to see if the free trade agreement with the European Union can be signed by the end of this calendar year and operationalised by the end of this fiscal year. India and the EU had announced that negotiations for the trade deal had been concluded on January 27, 2026.