India's trade with West Asia is gradually improving after a sharp slump triggered by the US-Iran conflict, Commerce Secretary Rajesh Agrawal said on June 15. Exports to the region in May 2026 reached "more or less" the same level as in May 2025, despite ongoing challenges, according to Agrawal.
Export recovery in May
India's merchandise exports to West Asia stood at USD 5.30 billion in May 2026, a marginal 1.5% decline from USD 5.38 billion in May 2025, as per commerce ministry data cited by Agrawal. "So we have more or less achieved the same level of exports in spite of the challenges that we are facing in that region," he told reporters.
Several key markets recorded strong year-on-year growth in May:
| Country | Export Growth (%) | Export Value (USD) |
|---|---|---|
| UAE | 3.18% | USD 3.06 billion |
| Saudi Arabia | 11.12% | USD 915.54 million |
| Jordan | 211% | – |
| Syria | 209% | – |
| Yemen | 16.5% | – |
India normally exports goods worth about USD 6 billion every month to the region, according to the source.
Impact of US-Iran conflict and peace deal
The trade disruptions were caused by the US-Iran conflict, which escalated after a joint attack against Iran by the US and Israel in February 2026, leading to restrictions on ship movements through the Strait of Hormuz. The 33-km wide waterway is a critical route for shipments from India to West Asian nations including the UAE, Oman, Iran, Bahrain, and Saudi Arabia.
India's exports and imports with West Asia declined by over 28% in April 2026, following a plunge of over 50% in March, according to the source. The conflict also triggered a global energy crisis, increasing prices of raw materials such as steel, plastic, and rubber.
US President Donald Trump announced that the US and Iran have finalised a deal to end their 107-day war. The peace agreement is scheduled to be signed on June 19, 2026, in Switzerland. Commenting on the deal, Agrawal said, "We hope it's a sustained deal" and added that the opening of the Strait of Hormuz would be "good" for India's trade.
Sectoral impact
Main sectors that recorded a dip in shipments include gems and jewellery, engineering goods, electronic items, petroleum products, and rice, as per the source.
Import trends
In May 2026, imports from Saudi Arabia grew 12.54% to USD 2.12 billion, and imports from Oman surged 305.66% to USD 1.93 billion. However, imports from the UAE dipped 10.17% to USD 5.7 billion.
Sources:
