Labour-intensive sectors see steep fall in exports in March

New Delhi: Engineering goods, electronics and pharmaceuticals were the key drivers of exports in FY26. Sixteen of the 30 top export sectors of the country witnessed a decline in the fiscal year including petroleum products, chemicals, textiles, readymade garments, gems and jewellery, rice and leather.

Among imports, inbound shipments of electronics crossed $100 billion for the first time in 2025-26, while exports totalled $48 billion in the full fiscal.

Data released by the commerce and industry ministry Wednesday showed that most labour-intensive sectors registered a steep decline in exports in March. While gems and jewellery exports slipped nearly 30%, readymade garments declined 19%. Drugs and pharma exports also slipped 19% in March. March was the first month of the war in West Asia that began February 28.


Food items such as rice, spices, fruit and vegetables, cashew and meat and dairy products too witnessed a decline in exports in March.

“The decline in exports to West Asia was steeper than industry expectations of 30-35%. The shipping activity disruption has not only impacted markets close to India but also long duration destinations such as Europe and the east coast of the US,” said Ajay Sahai, director general, Federation of Indian Export Organisations.

India’s goods exports to West Asia dipped 57.9% to $2.5 billion in March, while imports from the region fell 51.64% to $8.7 billion.

Non-petroleum and non-gems & jewellery exports in March 2026 were $31.69 billion compared to $34.25 billion in March 2025.

Plain gold jewellery exports declined 7.42% in FY26 largely impacted by elevated gold prices, which weighed on demand, particularly in price-sensitive markets, while exports of cut and polished diamonds decreased 8.52% on-year.

“This contraction was primarily influenced by the impact of US tariff increases implemented in the previous year, along with global inventory corrections, structural headwinds in key markets, subdued discretionary spending, and increasing competition from alternative luxury segments,” the Gems and Jewellery Export Promotion Council said.

Driven by a rise in prices, gold imports increased 24.08% on year, but the quantity of gold imports declined to 721.03 tons in FY26 from 757.09 tons in FY25.

Silver imports rose 149.5% driven by both a rise in prices and the quantity to 7,334.96 tons in 2025-26 from 5,164.37 tons in the previous fiscal.

“There has been a steep decline of 13.26% in exports of Man-Made Fibre Textiles in March 2026 as compared to March 2025, largely attributable to the ongoing West Asia conflict. Overall exports during FY 2025–26 have also witnessed a marginal decline of 0.79%, primarily due to the impact of US tariff measures and an adverse global trade ecosystem,” said Shaleen Toshniwal, Chairman, MATEXIL.

Cumulative exports of textiles and apparel in the last month of FY26 shrank 14.02% over March 2025.

“Traditional segments like cotton textiles are undergoing stress, reflecting challenges faced in demand and on costs. The sharp increase in cotton imports at 54.9% signals domestic supply constraints and cost pressures,” said Confederation of Indian Textile Industry chairman Ashwin Chandran.

Data showed that imports from the UAE, Saudi Arabia, Iraq, and Qatar in March slipped 66.32%, 37.32%, 64.30% and 47.89%, respectively. Exports to the UAE also declined by 61.93% and to Saudi Arabia by 45.67%. However, exports even to the US slipped by 20%.

The US, UAE, China, the Netherlands and the UK remained the main destinations for exports.