India's trade deficit narrowed to $20.67 billion in March 2026, a decrease from $21.7 billion in March 2025, as both exports and imports faced disruptions due to the ongoing conflict in West Asia. Merchandise exports dropped 7.44% to $38.92 billion, marking the steepest decline in five months, while imports fell 6.5% to $59.59 billion. Despite these challenges, India's overall trade deficit for the fiscal year 2026 widened to $333.2 billion, up from $283.5 billion in FY25. Commerce Secretary Rajesh Agrawal noted that exports and imports to West Asia halved in March, attributing this to logistical difficulties that are expected to persist into April. However, he expressed optimism for the upcoming fiscal year, highlighting that March exports were the highest of the year. India achieved record exports of $860 billion in FY26, reflecting resilience amidst global uncertainties. Key export sectors included engineering goods, petroleum products, and pharmaceuticals, while the country resumed rice exports to China after a two-year hiatus. Looking ahead, India is set to operationalize several free trade agreements, which may further enhance trade prospects.