India's Trade Deficit Narrows to $27.1 Billion in February Amid Rising Imports and Geopolitical Risks

India's merchandise trade deficit narrowed to $27.1 billion in February 2026 from $34.68 billion in January, as imports fell to $63.71 billion and exports slightly rose to $36.61 billion. Despite a marginal 0.8% decline in merchandise exports year-on-year, overall exports including services grew 11%, while imports increased 21%. The narrowing deficit contrasts with a wider year-on-year gap due to rising gold, silver, and energy imports. Geopolitical tensions in West Asia, especially the Iran conflict and Strait of Hormuz disruptions, pose risks to trade logistics and may impact exports in March. India's trade deficit with China exceeded $100 billion during April-February 2026, while exports to the US fell amid tariff changes. Authorities anticipate challenges ahead and plan support measures for exporters.