FX.co ★ India Trade Deficit Widens Sharply in September

India's merchandise trade deficit expanded dramatically to USD 32.15 billion in September 2025, rising from USD 20.8 billion in the same period the previous year, as per preliminary estimates. This increasing gap, marking the largest deficit since the record-setting figure in November 2024, was propelled by a 23.8% increase in imports, reaching USD 68.53 billion. This surge was primarily driven by gold imports, which almost doubled compared to the previous month, despite historically high prices. In contrast, exports experienced a modest increase of 5.2%, reaching USD 36.38 billion. This subdued growth is likely linked to delays in the US-India trade deal negotiations, with the US representing approximately 20% of India's goods exports. Going forward, it is anticipated that the trade deficit will remain substantial due to persistent high levels of gold imports, robust energy needs, and ongoing dependence on electronics and capital goods imports.