Trade deficit widens to $32bn as imports increase by 16.6%

The merchandise trade deficit of India widened to $32.15 billion in September as import surged by 16.6 per cent driven by increased demand for gold, silver and fertilisers, the government data said on Wednesday. In August, the trade deficit was $26.49 billion.

According to the Commerce and Industry Ministry data, imports surged by 16.6 per cent to $68.53 billion, leading to a trade deficit of $32.15 billion for the month. The gold imports doubled in September as compared to last year. The gold imports stood at $9.6 billion compared to $4.6 billion last year September. According to the government, the demand for precious metal spiked due to festivities.

The exports grew by 6 per cent in reaching $36.38 billion compared to $34.08 billion in the same month last year. The exports also saw an increase of over $1 billion compared to August. According to the ministry, surge was propelled by strong performances in key sectors, particularly electronic goods, petroleum products, engineering goods, rice, marine products and drugs and pharmaceuticals in September 2025.

The growth in export comes despite steep US tariffs and a turbulent year for global trade, signalling resilience in India’s export sector amid supply chain recalibrations. The US imposed 50 per cent tariffs on Indian goods effective August this year, alleging unfair trade practices by India and for purchasing oil from Russia.

Commerce Secretary Rajesh Agarwal highlighted the positive trend, noting that India’s goods and services exports had grown in the first six months of the current financial year (April-September) compared to the previous year.

“The positive thing is that in the first six months of the current financial year, India’s goods and services exports have grown, and even the trade deficit is lower,” Agarwal said.

For the April-September period, India’s total exports rose by 3.02 per cent to $220.12 billion. However, imports during the same period climbed by 4.53 per cent to $375.11 billion, driven by increased demand for gold, silver, fertilisers and electronics.

Interestingly, the US remained the largest export destination for India during the first half of FY26 with $45.82 billion outbound ships.