trade deficit
According to government data, India’s merchandise trade deficit increased to $41.68 billion in October, compared to $32.15 billion in September. According to a Reuters survey, economists had estimated the trade deficit in October at $28.8 billion, compared to $32.15 billion the previous month.
In the month of October, India’s exports declined by 11.8% to $34.38 billion, while imports increased by 16.63% to $76.06 billion. Talking on the deficit, the Commerce Secretary said India’s gold imports increased to $14.72 billion in October, compared to $4.92 billion in the same month last year.
India-US trade relations
Exports to the US declined to $6.3 billion in October from $6.9 billion in the same month last year, as talks progressed between India and the US for a two-nation trade agreement. This situation has come at a time when President Donald Trump had targeted India and imposed a very heavy tax (tariff) of 50% on buying oil from Russia. Due to this tax, Indian goods have become expensive and less competitive compared to Asian countries like Vietnam and Bangladesh.
After the tariffs, India announced relief worth more than $5 billion for its exporters. The government said that this step will increase money flow, ease business operations and help the country achieve the export target of $1 trillion. The biggest impact of these heavy taxes has been on labour-based industries like textiles, leather, footwear and jewellery.
current financial year
India’s total exports have increased by 0.63% to $254.25 billion in the period April-October 2025. However, during the same period, imports have jumped 6.37% to $451.08 billion, widening the overall trade deficit. Experts believe that India’s trade balance can become stable only after improvement in global demand, stability of supply chain and relief in crude oil prices. Heavy demand for gold during the festive season has temporarily increased imports, but if this trend continues, the current account may remain under pressure.