(Bloomberg) -- India’s trade deficit narrowed to a 11-month low in March as the nation reined in its import bill and a recovery in global demand helped keep exports steady.

The gap between exports and imports stood at $15.6 billion in March, Trade Ministry data showed Monday. The reading is lower than the $19 billion deficit forecast by economists in a Bloomberg survey.

The imports fell 6% to $57.28 billion in March, while exports fell 0.7% from a year earlier to $41.68 billion. The inbound shipments were $60.11 billion in February, while outbound shipments stood at $41.40 billion.

India’s economy is set to grow more than 8% in the fiscal year that ended in March making it the fastest-expanding major economy in the world. While the rising crude prices remain a concern for the world’s third-largest consumer of oil, lower gold imports helped tame the overall import bill. Gold imports stood at $1.5 billion in March, compared to $3.3 billion from a year ago period. 

India’s exports are moving in a “positive cycle,” Trade Secretary Sunil Barthwal told reporters in New Delhi. The outbound shipments remained above $40 billion for the second consecutive month in the fiscal year that ended March. 

However, as the conflict in the Middle East spirals following Iran’s attack on Israel last week, there are concerns over the global growth getting hit. Bloomberg Economics predicts a direct war between Israel and Iran would thrust the world economy into recession.

India is keeping a watch on the evolving trade situation amid the Middle East conflict, Barthwal said. 

The total exports throughout the year stood at 437.06 billion, marginally lower than the total exports of $447.46 billion achieved in 2022-23.

“We have been relatively better amid the global conflicts so far. However if the situation escalates, as we are seeing right now, the impact on exports would be felt hugely now,” Ajay Sahai, director general of Federation of Indian Export Organizations, said ahead of the data. 

India’s declining trade deficit will help the country in keeping its current account gap at manageable levels. The gap narrowed to 1.2% of gross domestic product in the October-December quarter.

(Updates with chart and additional details)

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