India, March 16 -- India's trade deficit narrowed more than expected in February as a cooling import bill offset stagnant exports, but that was before the Iran war took hold in West Asia-the source of 85% of India's imports.

The gap between imports and exports shrank to $27.1 billion last month, down from a revised $34.68 billion in January 2026, according to data released by the Ministry of Commerce and Industry on Monday. The figure came in lower than the $28.8 billion trade deficit predicted by economists in a Reuters poll, as the value of inbound shipments fell nearly 11% on a sequential basis.

The data offers a snapshot of the Indian economy just as geopolitical volatility enters a new, more dangerous phase. While the narrowing def...