The Indian-flagged tanker Jag Vasant, carrying liquefied petroleum fuel (LPG) after transiting via the Strait of Hormuz amid the continued battle within the Center East, is seen docked at an offloading terminal alongside the coast in Mumbai, India, on April 1, 2026.
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The Iran battle has taken a toll on India’s merchandise exports, dragging them down by greater than 7% in March, and dashing hopes of a restoration in a yr already marred by U.S. tariffs. Consultants warn that circumstances might worsen earlier than enhancing.
India’s items exports fell to $38.9 billion final month, from $42.1 billion a yr earlier, in keeping with information launched Wednesday by its commerce ministry.
The slowdown was sharp throughout key markets. Shipments to the UAE, India’s second‑largest export vacation spot, plunged practically 62% yr on yr, whereas these to its greatest market, the U.S., dropped 21%.
“There was broad‑based mostly weak point throughout key export classes — with agricultural items, textiles, chemical compounds, digital items, and gems and jewelry all registering damaging development,” world brokerage Nomura stated in a report on Wednesday.
Tariffs compound strain
For the monetary yr ending March 2026, items exports rose by lower than 1% to $441.78 billion, underscoring the harm attributable to 50% U.S. tariffs that had been in drive from August final yr till earlier this yr. The U.S. minimize tariffs on Indian items to 18% in February.
“U.S. tariffs had been a much bigger drag on Indian exports this yr,” Ajay Sahai, director‑basic and CEO of the Federation of Indian Export Organizations, advised CNBC’s “Inside India” on Thursday, including that the Iran battle had change into a contemporary supply of uncertainty for exporters.
Sahai stated a number of elements had slowed export development and that India was unlikely to fulfill its goal of reaching $2 trillion in exports by 2030, pushing it by about two years.
India set out that bold exports goal in 2022, together with items in addition to companies. Merchandise exports hit a file $451 billion within the monetary yr ending March 2023, however have did not surpass that stage since.
Extra ache forward
Nomura warned that Indian exporters now face a “troika of headwinds,” because the Iran battle drives price inflation, sharply raises delivery and insurance coverage prices, and weakens world demand.
Sahai echoed the priority, noting that exterior the Center East, exporters had been absorbing a lot of the rise in freight prices, with solely a part of it handed on to importers. Liquidity, he stated, stays the most important strain level, prompting trade calls for presidency assist.
“Even when there’s a settlement within the Center East in April, it would seemingly take at the very least two months to totally get well from the impression of the battle,” Sahai added.
March commerce information reveals the Iran battle had a extra pronounced impression on exports than on imports. India’s imports fell 6.5% in March to $59.59 billion, largely as a result of decrease oil imports amid provide disruptions stemming from the battle, analysts stated.
“At $12.2 billion, that is the bottom month-to-month oil import invoice in 13 months,” Citi stated in a report on Wednesday, including that the impression of upper crude costs would seem in commerce information with a one‑month lag.
India’s benchmark indexes, Nifty 50 and the BSE Sensex, had been down 0.3% on Thursday.