India’s merchandise trade deficit widened to a record high of $41.68 billion in October, up from $32.15 billion in September, driven largely by an increase in gold and silver imports, government data showed.
The trade deficit had widened to a 13-month high of $32.15 billion in September. In August 2024, the deficit stood at $35.62 billion, according to data from the Reserve Bank of India.
Economists had expected the October trade deficit to be $28.8 billion, according to a Reuters poll, compared to $32.15 billion in the previous month.
For October, India’s exports were down 11.8% to $34.38 billion in October while imports went up 16.63% to $76.06 billion.
Commenting on the deficit, the Commerce Secretary said that India’s gold imports in October jumped to $14.72 billion against $4.92 billion in the same month last year.
India-US trade ties
Exports to US were down to $6.3 billion in October from $6.9 billion in the same month last year, as tariffs hit shipments of goods such as textiles, shrimp, and gems and jewellery, data released by the Commerce Ministry showed.
The development comes as exporters had been seeking relief after President Donald Trump singled out India for purchasing Russian oil and imposed a stiff tariff of a total of 50%. The duty makes Indian goods uncompetitive relative to Asian rivals such as Vietnam and Bangladesh.
Following the tariffs, India announced relief measures worth more than $5 billion for its exporters.
The move will “strengthen liquidity, ensure smooth business operations, reinforce India’s progress towards achieving the $1 trillion export target,” the government said.
The crippling levies have hit labor-intensive sectors such as textiles, leather, footwear, and gems and jewelry the hardest.