New Delhi [India], November 24 : India's merchandise trade deficit widened to an all-time high of $41.7 billion in October 2025, driven by a sharp increase in gold and silver imports and a renewed contraction in exports, according to the Reserve Bank of India's (RBI) State of the Economy report in the November 2025 Bulletin.
The deficit, the highest for any month on record, reflects a combination of festive-season import spikes, weak global demand, and broad-based increases in non-oil non-gold imports, the report noted.
The RBI bulletin highlighted that India's merchandise exports returned to contraction in October after three consecutive months of growth. Weakness in global manufacturing and services activity, particularly in export orders, weighed on outbound shipments.
Global PMI data referenced in the report indicated that new export orders remained in negative territory, despite overall global output growing modestly.
Another significant observation made by the RBI Bulletin was in terms of gold and silver as it said there was a sharp rise in gold and silver imports being a major contributor to the record deficit. October coincided with the peak of the festive season, which typically drives jewellery demand.
The bulletin noted that digital gold purchases also climbed, with the category appearing among top UPI merchant transactions.
High global bullion prices further inflated India's import bill. Charts in the bulletin showed gold prices nearing historical highs during the period.
Apart from precious metals, imports of electronic goods, machinery, chemicals and consumer items rose in October. The RBI attributed this to strong domestic consumption and festive stocking by businesses.
Oil imports, however, remained stable as global crude prices stayed subdued, limiting energy-related pressures on the deficit.
Despite the merchandise trade deterioration, the RBI said India's external position remained broadly stable, supported by Robust services exports, Healthy remittance inflows, and Comfortable foreign exchange reserves.
The report also noted that the US decision to grant tariff exemptions to select Indian agricultural products from November 14 may provide limited support to export performance in the coming months.
In the November Bulletin, the economists expected the October spike to be temporary, driven largely by festive-season imports and precautionary restocking. Gold imports typically moderate in the winter months.
However, the RBI cautioned that global trade uncertainty, contracting export orders and volatile financial markets continue to pose risks to India's trade outlook.