October 2025 trade deficit touches record $41.68 billion

19 Nov 2025 , 02:50 PM

INDIA OCTOBER 2025 TRADE – DATA CHECK

For October 2025, merchandise trade deficit spiked to a level of $(41.68) Billion. This is the highest monthly merchandise deficit ever recorded. Tariffs imposed by Trump have led to a sharp fall in US exports, resulting in narrowing the trade surplus with the US. India tried to appease the US with oil orders, but the Indian trade situation is deteriorating. Services trade did improve, but it was not enough to offset the spike in merchandise trade deficit. The cumulative goods trade deficit stands at $(196.83) billion as of end-October 2025.

Key contributors to exports in October 2025 were Engineering Goods $9.37 Billion (-16.7%), Electronic Goods $4.08 Billion (+19.1%), Petroleum Products $3.95 Billion (-10.5%), Drugs & Pharmaceuticals $2.49 Billion (-5.2%), Gems & Jewellery $2.29 Billion (-29.5%), and Organic & Inorganic Chemicals $2.14 Billion (-21.0%). Key import contributors were crude & petroleum products $14.8 Billion (-21.7%), Gold $14.72 Billion (+199.2%), Electronic Goods $9.57 Billion (+14.7%), Machinery $5.19 Billion (+12.2%), Transport Equipment $2.90 Billion (+5.7%), Non-ferrous Metals $2.60 Billion (+13.9%), and Fertilizers $2.47 Billion (+86.8%).

Top export destinations for October 2025 were United States $6.31 Billion, United Arab Emirates (UAE) $3.33 Billion, China $1.63 Billion, the Netherlands $1.52 Billion, UK $1.00 Billion, and Singapore $0.91 Billion. Top import originating nations were China $11.10 Billion, United Arab Emirates (UAE) $7.33 Billion, Switzerland $5.09 Billion, Russia $4.85 Billion, United States $4.46 Billion, Hong Kong $3.45 Billion, and Saudi Arabia $2.83 Billion.

HOW MERCHANDISE TRADE EVOLVED IN LAST 1 YEAR

Here is the monthly data of merchandise exports, imports, and trade deficit.

Monthly Data	Exports ($ Billion)	Imports ($ Billion)	Total Trade ($ Billion)	Trade Deficit ($ Billion)
Oct-24	39.20	66.34	105.54	-27.14
Nov-24	32.11	69.95	102.06	-37.84
Dec-24	38.01	59.95	97.96	-21.94
Jan-25	36.43	59.42	95.85	-22.99
Feb-25	36.91	50.96	87.87	-14.05
Mar-25	41.97	63.51	105.48	-21.54
Apr-25	38.49	64.91	103.40	-26.42
May-25	38.73	60.61	99.34	-21.88
Jun-25	35.14	53.92	89.06	-18.78
Jul-25	37.24	64.59	101.83	-27.35
Aug-25	35.10	61.59	96.69	-26.49
Sep-25	36.38	68.53	104.91	-32.15
Oct-25	34.38	76.06	110.44	-41.68

Data Source: DGFT (# – All time high trade deficit)

How do trade figures compare with 12-month averages. Over last 12 months, the average merchandise exports stood at $37.14 Billion, and average merchandise imports stood at $62.02 Billion. For October 2025 exports are lower but imports are sharply higher than the average. The average trade deficit in last 12 months stood at $(24.88) Billion; with the October 2025 trade deficit sharply higher at $(41.68) Billion. In October 2025, total trade at $110.44 Billion was sharply above the previous 12-month average of $99.17 Billion.

TRADE GAP – EXPORT BOOSTERS AND IMPORT TRIMMERS

Here are star export performers in October 2025, on percentage increase in exports yoy. Cashew (+126.9%), Meat / Dairy / Poultry Products (+30.9%), Electronic Goods (+19.1%), Cereals (+14.7%), Marine Products (+11.1%), and Coffee (+10.9%) were the key export growth drivers in October 2025.  Major import trimmers in October 2025 were Pearls & Precious Stones (-25.4%), Petroleum (-21.7%), Pulp & Paper (-21.3%), Iron & Steel (-19.3%), Newsprint (-18.3%), Pulses (-16.4%), and Coal / Coke / Briquettes (-4.2%).

TRADE DATA BREAK-UP FOR OCTOBER 2025

Here is a break up of the merchandise and services export and import data for October 2025, with comparable figures.

Macro Variables (Trade Related)	Oct-25 ($ Billion)	Sep-25 ($ Billion)	Oct-24 ($ Billion)	Change YOY (%)
Merchandise Exports	34.38	36.38	38.98	-11.80%
Merchandise Imports	76.06	68.53	65.21	16.64%
Total Merchandise Trade	110.44	104.91	104.19	6.00%
Merchandise Trade Deficit	-41.68	-32.15	-26.23	58.90%
Services Exports	38.52	30.82	34.41	11.94%
Services Imports	18.64	15.29	17.23	8.18%
Total Services Trade	57.16	46.11	51.64	10.69%
Services Trade Surplus	19.88	15.53	17.18	15.72%
Combined Exports	72.90	67.20	73.39	-0.67%
Combined  Imports	94.70	83.82	82.44	14.87%
Overall Trade Volume	167.60	151.02	155.83	7.55%
Overall Trade Deficit	-21.80	-16.62	-9.05	140.88%

Data Source: DGFT and RBI

What is the big picture? For October 2025 the net deficit at $21.8 Billion is 140.8% higher than the year ago period. This is the second month in a row when there has been an atrociously high yoy growth in overall deficit. The services surplus has offset just 47.7% of the merchandise trade deficit in October 2025, sharply lower than last 3 months. The widening of the overall deficit can be attributed to a sharp widening of the merchandise trade deficit. Tariffs are pinching. Fortunately, the services exports have increased, but services imports are up too. At the end of the day, the service surplus was just too inadequate to offset the massive merchandise trade deficit.

CUMULATIVE TRADE DATA FOR FY26 (APR-OCT)

Having seen the monthly picture of October 2025, here is a cumulative 6-month view.

Macro Variables (Year-to-Date)	FY26 (Apr-Oct)	FY26 (Apr-Sep)	FY25 (Apr-Oct)	Change YOY (%)
Merchandise Exports	254.25	220.12	252.66	0.63%
Merchandise Imports	451.08	375.11	424.06	6.37%
Total Merchandise Trade	705.33	595.23	676.72	4.23%
Merchandise Trade Deficit	-196.83	-154.99	-171.40	14.84%
Services Exports	237.55	193.18	216.45	9.75%
Services Imports	118.87	97.68	114.96	3.40%
Total Services Trade	356.42	290.86	331.41	7.55%
Services Trade Surplus	118.68	95.50	101.49	16.94%
Combined Exports	491.80	413.30	469.11	4.84%
Combined  Imports	569.95	472.79	539.02	5.74%
Overall Trade Volume	1,061.75	886.09	1,008.13	5.32%
Overall Trade Deficit	-78.15	-59.49	-69.91	11.79%

Data Source: DGFT and RBI (Trade data in Billion $)

The overall trade deficit, combining merchandise deficit and services surplus, at $(78.15) Billion; is almost 11.8% higher compared to the corresponding 7 months of the previous fiscal. In addition, this year, the trade has to contend with steep US tariffs and the H1-B visa restrictions.  While the former is widening the merchandise deficit, the latter could potentially impact the services surplus in the coming months.

The current account deficit data for FY25 came in quite encouraging at a meagre 0.6% of GDP for the full year, thanks to a strong trade surplus in the fourth quarter. For FY26, the Q1FY26 CAD has been very impressive at just 0.2% of GDP. However, we could get a clearer picture when the second quarter data points come out in early December 2025. At the current run-rate, if the gold imports are not controlled, we could look at CAD crossing $100 billion, which could pose a problem for the rupee. Clearly, these are tough times!