At $41bn, trade deficit hits record high in October

NEW DELHI: India's trade deficit hit a record $41 billion in Oct as exports saw the steepest monthly decline in over a year, and imports rose to an all-time high, driven by a surge in gold and silver shipments into the country. The 11.8% fall in goods exports to $34.4 billion in Oct - which was lower than the month's trade deficit - was on account of sharp decline in shipments of engineering goods, gems and jewellery, pharma, textiles and chemicals.

In contrast, goods imports jumped 16.7% to $76.1 billion as fertiliser and precious metals saw a spike, while there was a 20% or higher decline in crude petroleum, steel as well as precious and semi-precious stones. Oil imports were down due to lower global prices, while diamond and other semi-precious stone shipments are seen to have declined due to lower demand of finished products in some of the markets, especially the US.

Services, however, did well with exports rising nearly 12% to $38.5 billion in Oct, while imports were 8% higher at $18.6 billion, resulting in a near $20 billion surplus.

"Global (export) growth is falling, and India remains a bright spot... After a dip in Oct we are poised for a good Nov," commerce secretary Rajesh Agrawal told reporters. He attributed a part of the fall in exports to high base effect of Oct 2024. Besides, there was an impact of lower prices of petrol and diesel, a key component of India's exports.

While there was also a decline in goods exports to the US due to steep 50% tariff on Indian products, Agrawal drew comfort from a slower pace of fall. Exports to the US are seen to have fallen 8.7% to $6.3 billion in Oct, it was lower than the 12% decline seen in previous month. "After growing for four consecutive months in current fiscal year, engineering goods exports declined sharply in Oct 2025, reflecting the impact of punitive tariffs imposed by the Trump administration... The decline in engineering goods shipments in Oct was expected, considering that 50% tariff imposed by the US came into force in last week of Aug," said EEPC India chairman Pankaj Chadha.

Others blamed it on global headwinds. "...export contraction mirrors the broader global economic slowdown, marked by geopolitical uncertainties, subdued demand in multiple major markets, and persistent volatility in commodity prices. Despite such headwinds, Indian exporters have displayed resilience, even as elevated logistics costs and fluctuating input prices continue to challenge competitiveness," Fieo president S C Ralhan said in a statement.

Interventions to boost exports

Agrawal said steps taken by govt, including Export Promotion Mission (EPM), interest subsidy and measures announced by RBI, will aid exporters, especially MSMEs. He said detailed guidelines of various components of EPM will be issued within Nov as govt was keen that benefits of Rs 25,000 crore scheme, spread over six years, quickly flowed to exporters.



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