India’s goods trade deficit hits record high in October as gold imports rise 200%

India’s goods trade deficit reaches all-time high $41.7 billion While gold imports increased in October due to demand during the holiday season, exports to the USA also bore the burden of high customs duties.

The $28.8 billion deficit hit an all-time high of $37.8 billion in November 2024, according to LSEG data, much higher than a Reuters poll predicted.

India imported $14.7 billion worth of gold in October, up nearly 200% from October last year, according to data released by the country’s commerce ministry on Monday. showed. It is estimated that Indian consumers purchased $11 billion worth of gold during the 5-day festival period in October.

While India’s exports to the US fell for the second consecutive month since the 50% tariff came into force at the end of August, the impact of the tariffs was also seen in trade data. Shipments to USA down 8.5% It rose to $6.3 billion on an annual basis in October.

Despite the decline, the US remained India’s largest export destination in the first 7 months of this financial year, handling shipments worth $52 billion.

India exported precious stones and jewelery worth $2.3 billion in October, down 29.5%, while it exported engineering products worth $9.4 billion, down 16.7%. Exports of cotton and artificial yarn and ready-made clothing fell by 12%-13%. The USA is the largest export point of all these commodities.

Meanwhile, India’s exports to China increased by 42% to $1.6 billion.

Indian credit rating agency ICRA Research, owned by Moody’s, said the country’s merchandise imports are “expected to cool slightly in November-December 2025 compared to October levels” due to a sequential decline in gold imports and some increase in exports with the end of the festival season. on a note On Monday.

But it warned that India’s current account deficit would “widen significantly to 2.4-2.5% of GDP” in the third quarter of the fiscal year ending March 2026. If the 50 percent US tariffs continue until the end of March 2026, it expects the current account deficit to be around 1.2 percent of gross domestic product in fiscal 2026.

Trade negotiations between the US and India have been going on for months, but so far no agreement has been reached. Both sides began to soften their stance after US President Donald Trump hinted that he would reduce customs duties on India.

Reaching out to Washington, New Delhi has increased its oil and gas purchases from the United States to reduce its trade surplus with Washington. The country is also expected to purchase agricultural products from the United States