India trade deficit widened to a 12-month high of 39.88 billion dollars in October 2026, as imports surged to a record level and outpaced a record month for exports. The Commerce Ministry released the figures on 13 November. Merchandise imports reached 89.35 billion dollars in October, up from 74.61 billion dollars in September. Merchandise exports rose to 49.47 billion dollars from 44.40 billion dollars in the previous month. The India trade deficit of 39.88 billion dollars was wider than September’s 30.21 billion dollars and above the 32.25 billion dollars forecast in a Reuters poll of economists.
India trade deficit in October
The India trade deficit grew by nearly 9.7 billion dollars in a single month, because imports rose faster than exports. The gap was the highest in 12 months, though it stayed below the 42.58 billion dollars recorded in October 2025. Trade Secretary Rajesh Agrawal said India had recorded its highest-ever monthly merchandise exports in October. Business Standard reported that exports rose 45 percent from a year earlier, making October the strongest month on record for Indian merchandise shipments. Combined exports of goods and services reached a record 89.9 billion dollars in October, up from 69.27 billion dollars in the same month last year, while combined imports rose to 110.07 billion dollars from 94.42 billion dollars.
For the April to October period, goods and services exports rose 16.66 percent from a year earlier to 568.84 billion dollars, while imports rose 16 percent to 662.19 billion dollars. That left a trade deficit of 93.35 billion dollars for the seven months, against 83.25 billion dollars in the same period last year. The October figures show both sides of trade growing, but imports growing faster. The ministry’s data put the overall trade picture in the same shape as the merchandise figures, with a deficit that widened as import bills rose more quickly than export earnings.
The India trade deficit was also larger than economists had expected, which surprised the market. The Reuters poll had put the October gap at 32.25 billion dollars, so the actual figure of 39.88 billion dollars came in 7.63 billion dollars above the forecast. The miss was driven by the import side, where gold and oil both rose more than expected. A wider trade gap can add pressure on the currency, since more dollars leave the country to pay for imports than come in from exports.
India trade deficit: gold and oil drive imports
The India trade deficit was driven in large part by gold and oil. Gold imports nearly tripled to 5.51 billion dollars in October from 1.8 billion dollars in September, as jewellers and consumers bought ahead of Diwali, when buying gold is seen as auspicious. Imports of petroleum products, mainly crude oil, rose 54.31 percent from a year earlier to 22.82 billion dollars, reflecting higher prices. India is the world’s third-largest oil consumer and imports close to 85 percent of its oil needs, so a rise in crude prices feeds straight into the import bill. Brent crude futures stood at around 92 dollars a barrel, offering some relief after recent highs.
The figures arrived in the same week that the rupee weakened to 94.24 against the dollar and retail inflation rose to 6.09 percent, above the Reserve Bank’s 6 percent upper limit. The India trade deficit adds to the pressure on both, since higher import bills and higher prices can feed into each other. The commerce ministry’s data for April to October showed the same pattern over seven months, with the deficit widening to 93.35 billion dollars from 83.25 billion dollars a year earlier.
Indian exports have also grown through the year as the country has worked to diversify its markets and signed new trade deals. New Delhi has put trade deals with the United Kingdom and New Zealand into effect this year, and an agreement with the European Union is expected to be implemented early next year. The October import surge also reflects festive-season demand at home, which lifted purchases of gold and consumer goods. The India trade deficit for October stood at 39.88 billion dollars, with imports at a record 89.35 billion dollars and exports at a record 49.47 billion dollars.