New Delhi: India’s merchandise trade deficit surged to a 13-month high of $32.15 billion in September 2025, driven by a sharp rise in gold and silver imports and a decline in exports to the United States following the imposition of steep tariffs. This widening gap reflects both seasonal demand and mounting external pressures on the country’s trade balance.
According to data from the Commerce Ministry, exports to the U.S. fell to $5.43 billion from $6.87 billion in August, affected by tariffs of up to 50% on goods such as textiles, shrimp, and gems and jewelry. Meanwhile, imports from the U.S. increased to $3.98 billion from $3.6 billion, further intensifying the trade imbalance. Commerce Secretary Rajesh Agrawal noted that while exports maintained momentum globally, imports grew at a faster pace, primarily due to rising demand for gold, silver, fertilizers, and electronics.
Gold imports nearly doubled to $9.6 billion in September from $5.14 billion the previous month, fueled by heightened demand for physically backed gold exchange-traded funds amid weaker stock market returns. Crude oil imports also climbed to $14 billion from $13.2 billion, while merchandise exports rose modestly to $36.38 billion from $35.10 billion in August. Economists warned that the widening deficit could pressure the current account and weigh on the rupee, which remains near record lows against the dollar.
In response to the U.S. tariffs, India and the United States have scheduled trade talks to finalize the first tranche of a bilateral deal by the end of next month. An Indian delegation is currently in Washington engaging in discussions aimed at easing tariff challenges and maintaining supply chain continuity. Nearly 55% of Indian exports to the U.S. are impacted by these duties, which began to affect shipments from September onwards.
Despite the trade deficit, India’s services sector continues to provide a cushion, with government estimates indicating services exports at $30.82 billion and imports at $15.29 billion for September. Combined, this suggests a total goods and services trade surplus of $15.53 billion, offering some relief against the widening merchandise deficit.
As India navigates rising import costs and U.S. trade restrictions, the outcome of the upcoming negotiations will be critical in determining the trajectory of its bilateral trade relations and overall economic stability.