New Delhi, India | April 10, 2026
India’s merchandise exports are expected to contract by 7–8% in March 2026, as escalating tensions in West Asia disrupt trade flows and drive up logistics costs, according to industry estimates.
The government is scheduled to release official export data on April 15, which is likely to reflect the impact of geopolitical instability on outbound shipments.
Exports Hit by Rising Costs and Disruptions
FIEO President S C Ralhan said the February 28 joint military action by the United States and Israel targeting Iran has disrupted trade routes and heightened uncertainty across West Asia.
“The situation has sharply increased freight, air transport, and insurance costs, impacting export competitiveness,” he noted.
Oil Flow Disruptions Add Pressure
Disruptions in oil and gas movement from West Asia have also pushed up input costs for key industries. Prices of raw materials such as steel, plastics, and rubber have risen, further squeezing exporters’ margins.
Higher crude prices and supply uncertainty remain critical risks for India, which relies heavily on energy imports.
Annual Outlook Remains Weak
For the full fiscal year 2025–26, merchandise exports are projected to decline by 2–3%, reflecting continued global uncertainty.
However, when combining goods and services, India’s total exports may still register a modest 5–6% growth, supported by resilience in the services sector.
Industry Calls for Policy Support
Amid the ongoing crisis, FIEO has urged the government to take targeted measures to ease pressure on exporters, including:
- Simplifying payments under duty exemption schemes
- Addressing high interest rate concerns
- Improving coordination between trade and customs authorities on classification and coding systems
These steps, industry leaders say, could help stabilize export performance in a volatile global environment.
Outlook: Trade Faces Uncertain Path
With geopolitical tensions persisting and costs rising, India’s export sector is entering a challenging phase. The upcoming official data release will offer clearer insight into the scale of the slowdown.
For now, exporters remain cautious, balancing opportunities in global markets with mounting operational pressures.
