India’s trade deficit hits record high on 200% surge in gold imports

US tariffs drag outbound shipments; exports dip 12% in October.

New Delhi: India’s trade deficit rose to a record high of $41.68 billion in October due to a sharp jump in import of gold and silver even as outbound shipments were impacted due to high US tariffs and decline in oil price, official data showed on Monday.

The value of gold imports surged to $14.72 billion in October from $4.92 billion recorded in the same month last year, recording a jump of around 200 per cent. Silver import surged from $0.43 billion in October 2024 to $2.72 billion in October 2025.

Gold and silver together accounted for over $12 billion surge in the trade deficit during the month under review when compared with the same month last year.

Briefing media, Commerce Secretary Rajesh Agrawal said gold imports surged due to festive and pent-up demands. The surge in import bill was partly due to rise in prices of the yellow metal.

The October trade deficit is sharply higher than $26.2 billion recorded in the same month last year. In September, it stood at $32.15 billion, which was the highest in 13 months. The October trade gap is the highest ever.

India’s merchandise imports surged by 16.63 per cent year-on-year to $76.06 billion in October. However, exports dipped by 11.8 per cent to $34.38 billion during the month under review.

“Our exports have fallen for the first time this year,” Agrawal said, adding the high base effect, lower prices of petroleum products and US tariffs hit India’s outbound shipments during the month.

Exports to the US fell by 9 per cent to $6.31 billion in October from $6.91 billion recorded in October 2024. However, on a sequential basis it was higher. In September, India’s exports to the US stood at $5.47 billion.

Key segments such as engineering goods, petroleum products, gems and jewellery, apparels and textiles, organic and inorganic chemicals, pharmaceuticals, and plastic goods witnessed noticeable contraction in exports. Major drivers of merchandise exports growth in October 2025 include electronic goods, meat, dairy & poultry products, marine products, cashew and coffee.

Federation of Indian Export Organisations (FIEO) President S C Ralhan said the contraction in India’s exports mirrors the broader global economic slowdown, marked by geopolitical uncertainties, subdued demand in multiple major markets, and persistent volatility in commodity prices.

Cumulative merchandise exports during April-October 2025 stood at $254.25 billion, marginally higher than $252.66 billion recorded in the corresponding period of the last year.

India’s total exports (merchandise and services combined) stood at $72.89 billion in October, which was lower than $73.39 billion recorded in the same month last year. On the other hand total imports jumped by 14.87 per cent to $94.70 billion during this period.

After recording positive growth for four consecutive months in the current fiscal year, engineering goods exports declined sharply in October, reflecting the impact of “punitive tariffs” imposed by US President Donald Trump administration, said Pankaj Chadha, Chairman, EEPC India. Engineering goods exports fell 16.71 per cent year-on-year to $9.37 billion in October.

“The trade deficit is expected to cool somewhat in November-December 2025 from the October levels on account of an anticipated sequential dip in gold imports, as well as some pickup in exports after the festive period ends,” said Aditi Nayar, Chief Economist, ICRA.

Nevertheless, the current account deficit appears set to widen materially to 2.4-2.5 per cent of GDP in Q3 (October-December) from the 1.8 per cent expected the previous quarter, Nayar added.