India’s trade deficit narrows to US$27.1 billion in February
Officials warn that the escalating crisis around the Strait of Hormuz could stall key shipments, and raise prices
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[NEW DELHI] India’s merchandise trade deficit narrowed to US$27.1 billion in February as imports eased from January.
Officials warned that the escalating crisis around the Strait of Hormuz could stall key shipments, and raise prices for the energy-importing country.
Economists had expected the February trade deficit to be US$28.8 billion, based on a Reuters poll, against a trade gap of US$34.7 billion in January.
India’s merchandise exports rose marginally to US$36.61 billion in February from US$36.56 billion in January, while imports fell to US$63.7 billion from US$71.2 billion, the data released by the commerce ministry on Monday (Mar 16) showed.
The data comes as the prolonged war in the Middle East has heightened uncertainty over India’s energy security and trade.
A blockade of the Strait of Hormuz, a key route for global oil and gas, has disrupted shipments, including those of liquefied natural gas, and could affect India’s broader trade with the region.
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“This year has been challenging for Indian exports, and there are logistical challenges being faced due to the West Asia crisis,” said Rajesh Agrawal, India’s trade secretary. He added that the government was considering steps to support the affected exporters.
India, the world’s No 3 oil consumer, imports more than 80 per cent of its crude oil needs and 60 per cent of its cooking gas, with the Middle East accounting for a large chunk of the supply.
The government has asked consumers to avoid panic buying of cooking gas cylinders, and proposed an “economic stabilisation fund” to provide fiscal headroom to respond to global headwinds.
US tariff relief
Merchandise exports to the United States, India’s largest export market, rose about 3.5 per cent month-on-month to US$6.8 billion in February. Shipments to the US between April 2025 and February 2026 stood at US$79.3 billion.
A US Supreme Court ruling against US President Donald Trump’s sweeping tariffs in February has resulted in lower tariffs for countries including India, benefiting the exports of textiles, jewellery and food products.
However, policymakers are concerned that the US administration’s launch of trade investigations into excess industrial capacity against India, along with 15 other major trading partners, could hurt exports over the coming months.
The Indian government said that it estimates its services exports at US$31.6 billion and imports at US$14.5 billion for February, resulting in a services surplus of US$17.1 billion, based on a Reuters calculation.
The country’s central bank publishes detailed monthly services trade data with a one-month lag, following the government estimates. REUTERS
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