India trade deficit widened to $28 billion in September 2025, driven by record gold imports and energy demand amid tariff delays with the US.
India Trade Deficit Widens Sharply in September 2025
India’s merchandise trade deficit widened to $28 billion in September 2025, up from $26.5 billion in August, marking the sharpest gap in over a year. The increase was driven by a surge in gold imports during the pre-festive season, combined with firm demand for energy, electronics, and capital goods.
This widening India trade deficit September 2025 comes amid global export headwinds, record-high gold prices, and continued uncertainty over the India–US trade deal.
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Festive Gold Rush Surpasses Price Barriers
Gold was the single largest driver of India’s trade gap. Imports nearly doubled month-on-month, with early estimates showing shipments of about 120 tonnes worth $9.6 billion, up from 65 tonnes ($5.2 billion) in August and 46 tonnes ($3.8 billion) in July.
Despite prices exceeding ₹106,000 per 10 grams, festive and wedding-season buying remained exceptionally strong. Analysts attribute the phenomenon to a mix of cultural drivers and bullish investment sentiment, as households anticipated future price gains and possible import duty hikes.
Gold now accounts for over 12 percent of India’s foreign exchange reserves, up from 9 percent a year earlier — highlighting its growing financial as well as cultural importance.
Broader Import Trends: Energy, Electronics, and Capital Goods
Beyond gold, imports across key sectors stayed robust. India’s crude-oil purchases remained elevated to meet rising industrial demand, while electronics and capital-goods imports reflected ongoing infrastructure expansion.
The Combined Raw Material and Commodity Import Price Index (CRY Index) edged up from 296.64 in August to 301.78 in September, indicating stable global commodity prices but insufficient to counterbalance the spike in gold values.
Overall, merchandise imports reached $61.3 billion in September compared with $61.6 billion in August, while exports slipped to $33.3 billion from $35.1 billion, a 5.1 percent decline.
| Month (2025) | Exports (USD Billion) | Imports (USD Billion) | Trade Deficit (USD Billion) |
| July | 34.5 | 59.8 | 25.3 |
| August | 35.1 | 61.6 | 26.5 |
| September | 33.3 | 61.3 | 28.0 |
India Trade Deficit: Trade Deal Delays and Policy Friction with the US
The United States, which absorbs about 20 percent of India’s merchandise exports, remains a key yet complicated partner. The India US trade deal, originally expected by late 2025, has been delayed amid rising protectionism.
Washington recently doubled tariffs on Indian goods from 25 to 50 percent, citing India’s continued import of Russian oil. These tariffs, along with US–China trade tensions, have disrupted global supply chains and weighed on Indian exporters.
Commerce Minister Piyush Goyal confirmed that discussions are ongoing despite political hurdles in Washington, including a partial government shutdown. Officials remain “constructively engaged” to conclude the first phase of the deal by November 2025, though the timeline is uncertain.
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Outlook: Persistent Challenges, Gradual Hopes
Economists expect the India trade deficit September 2025 trend to persist through the festive quarter. Gold imports are likely to stay high, while energy consumption and technology-related imports will continue to grow alongside industrial expansion.
Some easing could come from softening global commodity prices and India’s push for import substitution under the Make in India and PLI schemes. However, a meaningful improvement hinges on export recovery—dependent on tariff relief and renewed global demand in 2026.
A successfully concluded India US trade agreement could strengthen export competitiveness and support a gradual narrowing of the deficit, though structural benefits will take time to materialize.
India Trade Deficit: Conclusion
The India trade deficit September 2025 encapsulates the complex interplay of cultural consumption, energy dependence, and global trade politics. As policymakers navigate between short-term pressures and long-term reforms, India’s external balance in the coming months will hinge on the delicate alignment of domestic demand, global commodity trends, and trade diplomacy.