The Iran war has taken a toll on India’s merchandise exports, dragging them down by more than 7% in March, and dashing hopes of a recovery in a year already marred by U.S. tariffs. Experts warn that conditions could worsen before improving.
India’s goods exports fell to $38.9 billion last month, from $42.1 billion a year earlier, according to data released Wednesday by its commerce ministry.
The slowdown was sharp across key markets. Shipments to the UAE, India’s second‑largest export destination, plunged nearly 62% year on year, while those to its biggest market, the U.S., dropped 21%.
“There has been broad‑based weakness across key export categories — with agricultural goods, textiles, chemicals, electronic goods, and gems and jewellery all registering negative growth,” global brokerage Nomura said in a report on Wednesday.
For the financial year ending March 2026, goods exports rose by less than 1% to $441.78 billion, underscoring the damage caused by 50% U.S. tariffs that were in force from August last year until earlier this year. The U.S. cut tariffs on Indian goods to 18% in February.
