India’s Trade Gap Hits 20-Month Low On Softer Oil, Gold Imports

Recently, India has reported a trade deficit of USD 21 billion in March 2026, narrowing to a 20-month low. According to reports, the trade deficit narrowed because of the global supply chain disruption and blockade at the Strait of Hormuz that led to major reductions in oil and gold imports.

How Much Oil & Gold Did India Import?

India’s crude oil imports fell by 29% to USD 12.2 billion, and the gold imports were slashed by USD 3.1 billion. The reduction in imports was mainly due to the West Asia conflict, and the import volume could rise again once the situation normalises.

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Impact On Exports

The export front also witnessed the same impact due to weak global demand and lower imports, which softened domestic production. Exports fell sharply by 7.3%; however, the exports of petroleum increased by 5.9%. Reports further cautioned that the ongoing conflict in West Asia may result in lower remittances from Gulf nations, leading to increased pressure on India’s current account deficit (CAD)

The report projects India’s current account deficit to reach $70.1 billion, or 1.6% of GDP, in FY27, and said it could widen to 1.6–2.0% if crude averages $85–$95 per barrel.

On the backdrop of this news, markets largely remained calm, as these numbers were expected. The rupee remained steady and the risk now appears to have shifted to FY27.

Sources:

CNBC TV18

Business World