Economists had projected India’s February trade deficit at $28.8 billion, according to a Reuters poll, lower than the $34.68 billion deficit recorded in the previous month.
Meanwhile, during the April–February 2025–26 period, India’s merchandise exports stood at $402.93 billion, up from $395.66 billion in the same period last year, marking a 1.84% increase, according to official data.
The widening gap comes as global trade flows face fresh uncertainty due to tariff tensions and the ongoing conflict involving Iran, which has disrupted energy markets and key shipping routes in West Asia.
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However, the latest merchandise trade data does not yet reflect the impact of rising geopolitical tensions in the Gulf. Export momentum remains uneven across sectors, while higher freight costs, supply disruptions in West Asia and tariff disputes with key trading partners have begun influencing trade flows and exporter sentiment. The impact of these developments may become visible in the data in the coming months.
Speaking at the trade data briefing on Monday, India’s Trade Secretary Rajesh Agrawal said “exports to West Asia have been impacted due to conflict in the region.” He added that the government is “considering measures to support exports to the Middle East,” with more steps likely to be announced in the coming days.India’s exporters are navigating higher logistics costs and longer shipping routes after tensions in the Middle East disrupted key maritime corridors. The crisis has pushed freight and insurance premiums higher, forcing exporters to reroute shipments and absorb additional costs.
Exporters in sectors such as apparel and manufacturing have already begun adjusting shipment schedules and exploring alternate routes to sustain deliveries.
The conflict has also revived concerns over the Strait of Hormuz, one of the world’s most important energy shipping lanes and a critical route for India’s crude imports. Any disruption in this corridor could affect as much as half of India’s monthly imports, particularly oil and energy-linked shipments.
Higher oil prices linked to the conflict are adding to India’s import bill and could widen the trade deficit if the trend persists. Global markets have already reacted to the tensions, with crude prices rising sharply and investor sentiment weakening across emerging markets.
The Trade Secretary also said India has increased purchases of Russian oil this month, amid volatility in global energy markets.
Alongside geopolitical risks, tariffs have added another layer of uncertainty for exporters. The United States earlier faced setback from SCOTUS which called tariffs illegal. Howver, President Trump has vowed to impose tariffs via other means and ways.
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