New Delhi, Apr 15 (PTI) Exports posted the steepest fall in five months, declining by 7.44 per cent in March to USD 38.92 billion due to trade uncertainty and geopolitical tensions, with shipments to West Asia contracting by more than 50 per cent in the month, according to official data released on Wednesday.

The trade deficit, however, narrowed to a nine-month low of USD 20.67 billion in March on account of lower imports.

Imports dipped by 6.51 per cent to USD 59.59 billion in March, driven by a significant decline in inbound shipments of crude oil and gold, the data showed.

For the full 2025-26 fiscal year, exports grew 0.93 per cent to an all-time high of USD 441.78 billion, while imports rose 7.45 per cent to USD 775 billion. The trade deficit ballooned to USD 333.2 billion due to a jump in gold and silver imports during the last fiscal.

Commerce Secretary Rajesh Agrawal told reporters that the country's goods and services exports increased by an estimated 4.22 per cent to an all-time high of USD 860.09 billion in 2025-26 against USD 825.26 billion in 2024-25.

He said that despite global challenges, Indian exporters are showing resilience and are registering positive growth.

"We are hopeful that 2026-27 will be a much better year," he said.

The secretary said that India's exports to the Middle East region fell by 57.95 per cent in March, while imports from the Gulf nations fell by 51.64 per cent.

"Our exports to the Middle East in March dipped by 3.5 billion dollars (USD) and it has impacted (overall) exports," Agrawal told reporters.

Agrawal said that April could also be a tough month for exports due to the conflict, which is hampering ship movements in international waters.

Crude oil imports in March dipped 35.91 per cent to USD 12.18 billion, while in 2025-26, it declined 6.37 per cent to USD 174 billion. Gold imports in March dipped 31.63 per cent to USD 3.06 billion, while in 2025-26, these rose by 24 per cent to USD 71.97 billion.

The war in the Middle East has disrupted the flow of oil and gas through the Strait of Hormuz, pushing up freight and insurance costs for exporters.

"We hope the challenges that we face today will not sustain for long, and we may have smoother trades across the world in months to come," the secretary said.

Services exports, the secretary said, have remained robust.

Meanwhile, China has overtaken the US to emerge as India's largest trading partner in 2025-26, with bilateral trade reaching USD 151.1 billion, while the country's trade deficit with Beijing widened to USD 112.16 billion during the period, government data showed.

The US was India's largest trading partner for the four consecutive year till 2024-25.

The country's outbound shipments to the US grew marginally 0.92 per cent to USD 87.3 billion during the last fiscal, while imports increased 15.95 per cent to USD 52.9 billion. The trade surplus declined to USD 34.4 billion in 2025-26 from USD 40.89 billion in 2024-25.

The secretary said that energy imports from the US, including LPG, have gone up.

He added that despite global challenges, India's exports have remained in positive territory in 2025-26.

Free trade agreements that India will implement this year will provide opportunities for domestic exporters.

While the India-UK trade pact is expected to come into force from May, the trade deal with Oman may be implemented in June. PTI RR CS RR MR

Trade uncertainty and Middle East disruption weigh on exports as imports fall and the trade deficit narrows. Goods exports declined in March because of trade uncertainty and geopolitical tensions, with shipments to West Asia and the Middle East contracting sharply. Imports also fell, led by lower crude oil and gold shipments, narrowing the trade deficit to a nine-month low. For the full fiscal year, exports reached an all-time high, imports rose, and the trade deficit widened. Services exports stayed robust, while China emerged as India's largest trading partner.