India’s Exports to Middle East Fall 58% in March Amid West Asia Crisis

India’s trade flows with the Middle East faced a sharp disruption in March 2026, as geopolitical tensions in West Asia affected logistics and shipment movement.  

The decline reflects region-specific challenges even as overall export performance remained strong. 

Sharp Decline in Trade with Middle East 

Exports from India to the Middle East dropped by nearly 58% in March, according to Commerce Secretary Rajesh Agrawal. In absolute terms, outbound shipments to the region fell by $3.5 billion, bringing exports down to approximately $2.5 billion compared to the usual monthly average of around $6 billion. 

Imports from the region also witnessed a significant contraction, declining by $8.7 billion, or more than 50%.  

Agrawal noted that the sharper fall in imports is linked to India’s structural trade deficit with the region, largely driven by high energy imports. He stated that the dip reflects the fact that India imports more from the region, particularly energy products. 

The disruption has affected multiple sectors, including engineering goods, gems and jewellery, electronic goods, petroleum products and rice, all of which saw reduced shipments during the month. 

Logistical Challenges and Government Response 

The decline in trade has been attributed to logistical bottlenecks arising from the ongoing West Asia crisis, impacting shipping routes and port operations. Despite these challenges, authorities are working to sustain trade flows by exploring alternative pathways. 

Agrawal indicated that some ports in the Middle East remain operational and efforts are underway to route exports through these channels. He added that the government is maintaining close coordination with industry stakeholders to address operational hurdles as they arise. 

“Our approach is to keep in touch with stakeholders and resolve operational issues as and when they come,” he said, adding that most trade-related challenges triggered by the crisis have been addressed with ecosystem support. 

Outlook and Overall Trade Performance 

While disruptions in the Middle East corridor are expected to persist in the near term, exporters are likely to shift focus to other markets.  

Agrawal stated that exporters will adapt by diversifying to alternative geographies where shipments to the Middle East are not feasible, while emphasising that there are “no challenges on exports nationally.”

India’s overall merchandise exports stood at $38.92 billion in March, marking the highest monthly level in FY26. Imports were recorded at $59.59 billion, easing from $63.71 billion in February. However, on a year-on-year basis, merchandise exports were still down 7.4% in March. 

Read More: India’s Trade Deficit Widens to $119.3 Billion in FY 2025–26 on Higher Imports! 

Conclusion 

The sharp fall in exports to the Middle East highlights the impact of geopolitical disruptions on regional trade, even as India’s broader export performance remains resilient and supported by diversification efforts. 

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