New Delhi:India's merchandise trade deficit unexpectedly narrowed in March as a surge in exports to the US helped cushion the impact of the ongoing Iran war that has disrupted shipping routes and inflated energy costs. Follow Live Updates

The deficit fell to a nine-month low of $20.67 billion, with exports rising to $38.92 billion in March from $36.61 billion in the previous month and imports falling to $59.59 billion from $63.71 billion, data from the trade ministry showed on Wednesday.

Exports to the US rose 17.4 per cent month-on-month to $8.02 billion, supported by a cut in tariffs to 10 per cent following a US Supreme Court ruling.

This has helped boost shipments of textiles and engineering goods to India's largest export market that had imposed tariffs of up to 50 per cent on a wide swath of goods.

The trade data underscore the opposing forces shaping India's export outlook: supply disruptions and surging logistics costs stemming from the Iran conflict and a partial revival in US demand.

While lower tariffs have bolstered shipments, exporters warn about rising freight and insurance costs, alongside severe delays near the Strait of Hormuz - a critical supply route that has been nearly blocked for a month and a half.

Negotiations between the US and Iran over the weekend failed but talks could resume this week.

Source:Ndtv