Trade Dynamics Shift Amidst Geopolitical Tensions

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.