India’s September Trade Deficit Hits $31.15 Billion, Highest in Over a Year
India’s merchandise exports grew 6.74% to $36.38 billion in September 2025, while imports surged 16.6% to $68.53 billion, widening the trade deficit to $31.15 billion – the highest level in over a year.
Key Takeaways
- Exports show resilience despite 50% US tariffs on Indian goods
- Gold imports surge 106.93%, fertiliser up 202.34% in September
- Electronic goods exports jump 50.54%, rice shipments grow 33.18%
- Cumulative April-September trade deficit stands at $154.99 billion
Import Surge Driven by Precious Metals and Fertiliser
The significant increase in imports was primarily driven by gold imports which skyrocketed 106.93% to $9.6 billion in September. Fertiliser imports jumped 202.34% to $2.36 billion, while silver imports surged 139% to $1.3 billion during the month.
Commerce Secretary Rajesh Agrawal attributed the increased imports to festive demand and rising metal prices. “Festive demand and a jump in prices of these metals were cited as the reasons for the increase in their imports,” he noted.
Export Resilience Amid US Tariff Pressure
Despite the steep 50% tariffs imposed by the US on Indian goods from August 27, exports recorded positive growth. Remarkably, 45% of India’s exports to the US remain outside the ambit of these high tariffs.
“They have been able to expand trade with the US by maintaining their supply chains and business relations. They may have taken on some cost losses but maintained those supply chains,” Agrawal told reporters.
Sector-wise Export Performance
Growth Sectors:
- Electronic goods: 50.54% growth to $3.11 billion
- Rice shipments: 33.18% growth to $924.88 million
- Marine products: 23.44% growth to $781 million
- Engineering goods: 2.93% growth to $10.11 billion
- Gems and jewellery: 0.40% growth to $2.83 billion
Declining Sectors:
- Readymade garments: -10.14% to $997 million
- Cotton and handloom: -11.66% to $930 million
- Petroleum products: Down to $30.63 billion from $35.65 billion
Cumulative Performance and Services Exports
During April-September 2025, cumulative exports increased by 3.02% to $220.12 billion, while imports rose 4.53% to $375.11 billion. The services export for September was estimated at $30.82 billion, with April-September cumulative services exports reaching $193.18 billion.
Agrawal highlighted that India’s exports have registered healthy growth in 24 countries, including the UK, UAE, Netherlands, Germany and Bangladesh.
Industry Recommendations
The Federation of Indian Export Organisations (FIEO) strongly recommended fast-tracking ongoing Free Trade Agreements with the European Union, United Kingdom, Latin American countries, and the GCC to enhance market access and reduce trade barriers.
FIEO President SC Ralhan emphasized the need for “renewed focus on building domestic manufacturing capabilities in critical sectors, such as electronics, machinery, and intermediate goods.” He urged the government to take bold steps toward import substitution by encouraging local production.
