India’s merchandise exports defied expectations by rising nearly 10% in the March-June period despite disruptions caused by the West Asia conflict, thanks to strategic diversion into alternative markets like China and Hong Kong.
India’s export performance held up better than many had expected this year, even as the war in West Asia disrupted a key trading corridor. According to Business Standard, India’s total merchandise exports rose 9.73% in the March-June period, despite a 21.74% fall in shipments to West Asia. The data suggest that a broader push into alternative markets helped cushion the blow.
The sharpest hit came from the United Arab Emirates, India’s biggest export destination in West Asia and its second-largest overall market after the US. Exports to the UAE fell 25.54% year on year in March-June, with chemical products, ready-made garments, agricultural goods, and gems and jewellery among the hardest affected categories. Even so, shipments to China and Hong Kong emerged as the main beneficiaries of India’s diversion strategy, helping offset weakness in the Gulf. Business Standard also reported that exports to the UAE recovered in July, rising 10.15% from a year earlier.
The broader pattern fits a wider shift in India’s external trade. The Economic Times reported earlier that India’s goods and services exports rose marginally in 2023 to $765.6 billion, with services providing an important buffer even as merchandise exports weakened. More recently, the Finance Ministry’s Monthly Economic Review for July 2026, as reported by Moneycontrol, said exporters were able to redirect shipments to other markets after the West Asia conflict disrupted trade flows. Petroleum products were among the clearest examples, with exports shifting towards Singapore, South Africa and Tanzania.
But the resilience has not been even across all products. Moneycontrol said diversification has been less effective for basmati rice, pearls, and precious stones, where stronger sales to other destinations have not fully replaced demand from West Asia. Separate reporting by the Financial Express and the Economic Times has also highlighted shipping delays, rising insurance costs and wider logistical strain as conflict in the region intensified, underscoring how fragile trade routes can quickly affect exporters even when headline numbers remain solid.
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