India’s Trade Deficit Widens to Record as US Export Slump

By Shruti Srivastava and Anup Roy

Nov 17, 2025 India’s trade deficit widened to a record last month, with exports to the US plunging for a second consecutive month after President Donald Trump’s 50% punitive tariffs.

The gap between exports and imports stood at $41.68 billion last month, according to official data Monday, well above the $30 billion deficit forecast by economists in a Bloomberg survey. Exports contracted almost 12% from a year earlier, with shipments to the US dropping 8.6%.  

The US is India’s biggest export market, and Trump’s tariffs are hitting labor-intensive sectors such as textiles, leather, footwear, and gems and jewelry the hardest. Last week, India’s cabinet announced relief measures worth more than $5 billion for exporters, including collateral-free loans and other programs.

The tariffs have roiled India’s financial markets, with the rupee down 3.5% against the dollar this year, trading close to a record low. 

India and the US are currently negotiating a trade deal to lower the tariff rate, with Commerce Secretary Rajesh Agrawal indicating on Monday that a resolution was near. Trump said last week that he’ll lower tariffs on India “at some point.”

State refiners have scaled back purchases of Russian oil, a key demand from Trump, while India on Monday announced the first long-term deal to buy liquefied petroleum gas from the US. 

Read More: India Seals First LPG Term Deal With US Amid Trade Talks 

“India has been contemplating purchasing from the US for long,” Agrawal said. “It’s not part of any negotiation per se,” but to keep trade with the US balanced.

Imports continued to surge last month, expanding more than 16% in October from a year earlier, contributing to the widening in the trade gap. Gold imports surged almost 200% in October from a year ago to $14.7 billion, as prices soared to a record. Demand for gold and silver typically rises during India’s religious festival of Diwali, which took place last month. A reduction in the goods and services tax in September also helped to boost overall spending.     

“With no respite in gold price spike, the imports pressure is here to stay, even as the festive-led volume effect may ease,” said Madhavi Arora, an economist with Emkay Global Financial Services Ltd. 

© 2025 Bloomberg L.P.

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