India's trade deficit shrinks to US$20.98 billion in March

[NEW DELHI] India’s merchandise trade deficit narrowed to US$20.98 billion in March, government data showed on Wednesday (Apr 15), amid risks the Iran war could impede exports to Gulf countries while raising the cost of energy and other imports.

Economists had expected the trade deficit to be US$32.75 billion in March, according to a Reuters poll, compared with a deficit of US$27.1 billion in the previous month.

India’s merchandise exports rose to US$38.92 billion in March from US$36.61 billion in February, while imports fell to US$59.9 billion from US$63.71 billion, data showed.

The US on Wednesday said its military had completely halted trade going in and out of Iran by sea, even though President ​Donald Trump said talks with Teheran on ending the war could resume this week.

The war has prompted Iran to effectively shut the Strait of Hormuz, a crucial global waterway for crude and gas transport, disrupting energy supplies for net energy importer India, while crimping its trade with the Middle East.

India – unlike Japan, South Korea and Taiwan – depends on the Gulf shipping routes to move its products, and those routes have becomes prohibitively expensive as freight and insurance costs spike. REUTERS