India’s trade deficit widened in March, while retail inflation shrank to the lowest in nearly six years last month, government data released on Tuesday showed.

The gap between exports and imports last month stood at $21.54 billion, higher than the trade deficit in February that had narrowed to $14.05 billion, the lowest in about three years.

Exports increased 0.7% in March to $41.97 billion from a year ago, while imports rose 11.4% to $63.51 billion, the data showed.

The past fiscal was “difficult” with rising geopolitical tensions, commerce secretary Sunil Barthwal said at a briefing in Delhi.

India’s overall exports crossed $820 billion in fiscal 2025, he added.

Outbound shipments next year will depend on several factors, including how nations react to Trump’s tariffs, he said.

Oil imports rose to $19 billion in March from $11.8 billion in February, while gold imports almost doubled to $4.4 billion last month from $2.3 billion in February.

The trade data comes as India is racing to evade US President Donald Trump’s tariff blitz, which has been put on pause for three months.

Exporters have nudged the government to seal a bilateral trade deal with the US as soon as possible.

Officials from both sides have been holding virtual trade talks, with in-person negotiations likely to start next month, Bloomberg reported, citing a government official who asked not to be identified in line with government rules.

Both tariffs and non-tariff trade barriers are being discussed by the two sides, the official added.

India and the US had on February agreed to put in place a preliminary pact by October.

However, despite the negotiations, Trump slapped India with a 26% tariff rate on 2 April, before announcing the three-month pause.

Besides a deal with the US, India is also racing to put in place free trade deals with other trading partners, including the EU and the UK.

The next round of India-EU trade talks are scheduled for 12-16 May. In February, both sides agreed to sign a free trade deal by the end of this year.

“There are both concerns and opportunities for India this year,” Barthwal said, adding that India is exploring an interim trade deal with the EU.

Retail inflation at six-year low

Meanwhile, the Consumer Price Index (CPI) rose 3.34% in March from a year ago, statistics ministry data showed, slower than the 3.61% in February.

A reading below the Reserve Bank of India’s (RBI’s) 4% target validates its push to cut interest rates by a quarter point in its two previous meetings

RBI, which has lowered the benchmark rate to 6%, last week signaled more easing as it shifted its policy stance to accommodative from neutral.

Easing food inflation and slowing oil prices will allow RBI to stick with its loose policy settings.

The meteorological office this week said it see above-normal monsoon rains this year, boosting prospects for the agriculture sector.

Food inflation, which makes up a sizeable chunk of the CPI index, eased to 2.69% in March from 3.75% in February.

Vegetable prices fell 7.04% in March after declining 1.07% in February, the data showed.