October Trade Deficit Hits
Record High on Surge in Gold Imports with Fall in Exports to US, Service
Exports Up, Value Outstrips Goods by $4bn, China Export Up
Ø India’s merchandise trade
deficit hit a record $41.68 billion in October, driven by a surge in
gold imports and declining exports to the U.S. This marks a sharp jump from
$32.15 billion in September (a 13-month high) and $35.62 billion in August.
Ø Economists had expected
the deficit to be much lower ($28.8 billion), indicating a worse-than-expected
outcome.
Ø The main factors:
o Gold imports soared to $14.7 billion (up from $9.6 billion in
September).
o Crude oil imports rose to $14.8 billion (up from $14
billion in September).
o U.S. tariffs: The second month of steep (up to 50%) U.S. tariffs on
Indian goods especially hit exports of textiles, shrimp, and gems/jewellery.
Exports to the U.S. fell almost 9% year-on-year in October to $6.31 billion.
Ø Overall merchandise
exports declined to $34.38 billion from $36.38 billion in September, while
total imports jumped to $76.06 billion from $68.53 billion.
Ø India’s services sector
helped offset the goods deficit: Estimated October services exports were
$38.52 billion vs imports of $18.64 billion, resulting in a $19.88 billion
services surplus.
Ø Containerized exports
from India to the U.S. saw a sharp decline (down 18.5% year-on-year), the
largest drop among top trading U.S. partners. China saw -16.3%;
other countries posted increases driven by lower tariff deals.
Ø The Indian government
announced support measures and export promotion incentives (including loan
relief) to help exporters manage liquidity and shipping delays caused by
tariffs and global disruptions.
Ø U.S.-India trade talks
are ongoing: U.S. tariffs were imposed over India’s purchases of
Russian oil, but the U.S. has just removed tariffs on dozens of agricultural
items, giving some relief to Indian farmers. President Trump has suggested a
potential trade agreement could be reached soon.
Ø
Major
drivers of merchandise exports growth in October 2025 include Electronic Goods,
Meat, dairy & poultry products, Marine Products, Cashew and Coffee
Ø
Electronic
Goods exports increased by 19.05 % from US$ 3.43 Billion in October 2024 to US$
4.08 Billion in October 2025
Ø
Meat,
dairy & poultry products exports increased by 30.87 % from US$ 0.45 Billion
in October 2024 to US$ 0.58 Billion in October 2025
Ø
Marine
Products exports increased by 11.08 % from US$ 0.81 Billion in October 2024 to
US$ 0.90 Billion in October 2025
Ø
Cashew
exports increased by 126.85 % from US$ 0.03 Billion in October 2024 to US$ 0.06
Billion in October 2025
Ø
Coffee
exports increased by 10.91 % from US$ 0.12 Billion in October 2024 to US$ 0.13
Billion in October 2025
India's
merchandise trade deficit widened to a record high of $41.68 billion in
October, due to a rise in gold imports and a fall in U.S.-bound exports during
the second month of steep U.S. tariffs on Indian goods, government data showed
on Monday.
The
trade deficit had widened to a 13-month high of $32.15 billion in September. In
August 2024, the deficit stood at $35.62 billion, according to data from the
Reserve Bank of India.
Economists
had expected the October trade deficit to be $28.8 billion, according to a
Reuters poll, compared to $32.15 billion in the previous month.
U.S.
President Donald Trump's administration imposed steep tariffs of up to 50% on Indian
shipments at the end of August. October is the second full month when the
tariffs remained in place, even as New Delhi and Washington continue the
negotiations.
Exports
to the U.S. fell nearly 9% year-on-year last month to $6.31 billion from $6.91
billion a year ago, and increased from $5.47 billion in September, as tariffs
hit shipments of goods such as textiles, shrimp, and gems and jewellery, data
released by the Commerce Ministry showed.
Overall
merchandise exports fell to $34.38 billion last month from $36.38 billion in
September, while imports climbed to $76.06 billion from $68.53 billion.
"There
are discussions going on, and we hope again, part of the agreement which needs
to agree on the reciprocal (tariffs)…..should happen. I don't have a timeline
in my mind, but it can happen," said Trade Secretary Rajesh Agrawal.
Imports
from the U.S. rose to $4.47 billion in October from $3.98 billion in the
previous month.
Gold
imports stood at $14.7 billion compared with $9.6 billion in September.
Crude
oil imports rose to $14.8 billion in October from $14 billion in the previous
month.
The
government estimated October services exports at $38.52 billion and imports at
$18.64 billion, suggesting a total services trade surplus at $19.88 billion,
according to Reuters calculation.
India's
central bank publishes detailed monthly services trade data with a one-month
lag, following government estimates.
Relief Measures
India
has seen among the sharpest drop in container volume of shipments to the U.S.
among other major trading partners.
U.S.
container imports from the top 10 countries it buys goods from fell 9.4%
year-on-year in October, led by a 16.3% drop from China and an 18.5% fall from
India, according to Descartes, a supply chain technology provider. Shipments
from Japan, Germany, South Korea, Vietnam, Indonesia rose following recent
lower tariff agreements.
Last
week, the Indian government and the Reserve Bank of India announced support
measures for exporters, including incentives for export promotion and relief on
loan repayments.
S.C.
Ralhan, President of the Federation of Indian Export Organisations (FIEO), said
these measures "offer much-needed relief, allowing exporters more time to
ship goods against advance payments and eases liquidity through support on term
loans and packing credit."
He
added that the move aligns with other major economies, "ensuring a level
playing field for Indian exporters."
Trump
had doubled tariffs on Indian goods to 50% over Indian purchases of Russian
oil. However, in his latest comments Trump said the United States and India are
close to reaching a deal.
Meanwhile,
the U.S. removed tariffs on dozens of agricultural items, offering some relief
to Indian farmers.