Widening Gap: India’s Trade Deficit Soars to $32 Billion Amid Import Boom
- Tharindu Ameresekere
- 4 days ago
- 1 min read
India’s merchandise trade deficit surged to USD 32.15 billion in September 2025, marking a significant increase from USD 24.42 billion a year earlier, according to flash estimates released by the Commerce Ministry. The widening gap, the largest since the record deficit in November 2024, reflects a sharp rise in imports alongside only modest export growth.
Imports jumped 16.7% year-on-year to USD 68.53 billion, driven largely by soaring gold purchases, which nearly doubled from the previous month despite record-high global prices. Robust energy and electronics demand also contributed to the import surge, underscoring India’s continued dependence on key capital and consumer goods.
On the export front, merchandise shipments grew 6.1% to USD 36.38 billion, buoyed by resilient performance in select manufacturing sectors. Commerce Secretary officials noted that goods exports expanded 6.7% in September, the first full month under 50% U.S. tariffs, indicating that Indian exporters have so far managed to withstand global trade turbulence. However, progress was tempered by delays in the long-anticipated U.S.-India trade deal, with the United States accounting for roughly 20% of India’s total exports.
Meanwhile, services exports fell 5.5%, further weighing on the overall trade balance. Total imports, combining both goods and services, rose 11.3%, reflecting robust domestic demand and the seasonal uptick in gold buying ahead of the festival season.
Looking ahead, analysts expect the trade deficit to remain elevated through the final quarter of 2025, as India continues to rely heavily on imported energy, electronics, and industrial inputs. While policymakers see resilient export sectors as a buffer, the widening gap highlights the challenge of sustaining external stability amid shifting global trade dynamics.
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