Global Challenges Impact India's Merchandise Exports

India's merchandise exports may decline by 2-3% in 2025-26, largely due to uncertainties in the global economy and the ongoing crisis in West Asia, according to the Federation of Indian Export Organisations (FIEO). The situation worsened following a joint attack by the US and Israel on Iran.

This conflict significantly hindered India's export activities to West Asia, causing shipping freight and transport prices to soar. Moreover, disruptions in oil and gas movement have inflated the costs of essential raw materials. Exports plummeted by 7-8% in March, yet goods and services exports could increase by 5-6%, says FIEO President S C Ralhan.

As the US and Iran announce a ceasefire, optimism grows for export recovery. The government is urged to mitigate high interest rates and streamline trade processes to aid exporters facing challenges, especially in key sectors such as petroleum, chemicals, and agriculture.