India’s merchandise exports slipped marginally by 0.81 per cent year-on-year to $36.61 billion in February 2026, reflecting persistent global uncertainties, according to data released by the Commerce Department. However, a sharper challenge looms in March as escalating tensions in West Asia and ongoing logistical disruptions threaten to further strain outbound shipments.
Imports surged 24.11 per cent to $63.71 billion during the month, driven largely by higher inflows of gold and silver. This resulted in a widening trade deficit of $27.1 billion—nearly double the $14 billion recorded in February 2025, though lower than January 2026’s $34.68 billion gap.
Commerce Secretary Rajesh Agrawal acknowledged the mounting pressures on trade, citing the fallout from geopolitical tensions, including the US-Israel attack on Iran in late February. “On the trade front we are facing one challenge after the other… March will pose a greater challenge due to the West Asia situation,” he said, adding that the government aims to offset losses in affected regions by boosting exports to alternative markets.
Despite these headwinds, the government remains cautiously optimistic about maintaining positive merchandise export growth in FY26. A support package for exporters impacted by disruptions in West Asia is expected to be announced within a week.
During the April–February period of FY26, India’s goods exports rose 1.84 per cent to $402.93 billion, compared to $395.66 billion in the corresponding period last year. Imports during the same period increased by 8.53 per cent to $713.53 billion.
The February export dip was primarily attributed to a sharp 40 per cent decline in petroleum shipments, which fell to $3.42 billion. Other sectors that recorded contractions included ready-made garments, leather and leather products, iron ore, and plastics.
Exports to the United States—India’s largest trading partner—declined 12.88 per cent to $6.88 billion in February. The drop followed the imposition of steep reciprocal and penal tariffs of up to 50 per cent, which have since been rolled back and replaced with a temporary global tariff of 10 per cent.
With geopolitical risks intensifying and trade routes under pressure, the coming weeks will be critical in determining whether India can sustain export growth momentum through the end of the fiscal year.
