India's export momentum faces geopolitical headwinds.

India's export momentum faces geopolitical headwinds. Merchandise exports fell to $38.9 billion in March from $42.1 billion year-over-year, with the US-Iran conflict impacting shipments in the final month of fiscal 2025-26. Despite this setback, India's annual goods exports reached $441.8 billion, marking modest growth from $437.7 billion previously, demonstrating resilience against US tariff pressures. Imports also declined to $59.6 billion, narrowing the trade deficit to $20.7 billion. Recovery prospects depend on three critical factors: swift resolution of geopolitical tensions, clarity on US trade policy direction including Special 301 investigations, and potential bilateral trade negotiations. While a weaker rupee theoretically supports export competitiveness, global markets demand more than currency advantages.