India’s Trade Deficit Hits Record $41.68 B in October
India’s merchandise trade deficit widened to an all-time monthly high of USD 41.68 billion in October 2025, up from USD 32.15 billion in September. The figure far exceeded market expectations of around USD 29 billion.
Drivers Behind the Widening Gap
Despite weak global demand, India’s merchandise exports declined by roughly 11.8% year-on-year to USD 34.38 billion in October. At the same time, imports surged to an estimated USD 76.06 billion. Key contributors were a massive rise in gold imports — nearly tripling to about USD 14.72 billion — and continued high crude oil import bills (around USD 14.8 billion). The sharp jump in precious-metal purchases and elevated energy imports have significantly strained the trade balance.
What This Means for Economy and Policy
The record trade deficit raises concerns about India’s external account stability and dependence on volatile commodity imports. While the country had a services trade surplus of around USD 19.9 billion, it is unlikely to offset the merchandise shortfall in the near term. Policymakers may face increasing pressure to restrain gold imports, diversify export markets and boost value-added manufacturing to improve resilience.\
