Home / Business and Economy / India's Trade Gap Hits Record High Amidst Gold Surge
India's Trade Gap Hits Record High Amidst Gold Surge
22 Nov
Summary
- India's goods trade deficit reached an all-time high of $41 billion.
- Gold imports surged to $14.7 billion, significantly widening the deficit.
- Despite falling global oil prices, India's oil deficit remains unchanged.
India's current account deficit is facing unprecedented pressure, with the goods trade deficit widening to an all-time monthly high of $41 billion. This alarming figure was substantially influenced by a $14.7 billion gold import bill during the recent festival season, pushing the overall deficit to record levels despite a surplus in services.
While the headline deficit number is concerning, analysts highlight deeper structural issues. Notably, India's oil import deficit has remained stagnant despite a nearly 10% drop in global crude prices since early 2025. This is attributed to a significant increase in import volumes, puzzling economists given minimal growth in domestic consumption data.
Compounding these challenges, India's merchandise exports experienced an 11.8% year-on-year decline in October 2025, with shipments to the U.S. also falling. Consequently, the services sector's traditional role as a buffer is proving insufficient. While full-year CAD forecasts are currently stable around -1% of GDP, risks persist from tariffs, oil import dynamics, and potential capital outflows.
