•External sector pressures are building for India amid a volatile global backdrop, as per the Finance Ministry’s Monthly Economic Review for March 2026.
•Merchandise exports declined marginally by 0.8% (YoY), while imports surged by 24.1% (YoY), primarily driven by gold and silver imports.
•The merchandise trade deficit widened significantly to USD 27.1 billion in February 2026 from USD 14.4 billion in February 2025.
•India’s current account deficit (CAD) expanded to 1.3% of GDP in Q3 FY26, up from 1.1% in Q3 FY25, largely due to the higher trade deficit.
•Portfolio flows remained negative in March 2026 due to geopolitical uncertainty, and rising crude oil prices pose further risks to the trade balance and Indian Rupee.
