Trade deficit widens

India's merchandise trade deficit, the gap between imports and exports, widened to a 13-month high of $32.15 billion in September, driven by a surge in imports and a drop in exports to the US following Donald Trump's 50% tariffs on Indian goods. As India imports more than it exports, any decline in exports worsens the deficit.

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India’s merchandise trade deficit widened to a 13-month high of $32.15 billion in September, due to a surge in gold and silver imports and a drop in exports to the US following Donald Trump's up to 50% tariffs on Indian goods, data showed Wednesday.

India’s trade deficit stood at $34.03 billion in August 2024. The first half of the current fiscal year has seen India’s merchandise trade deficit widen to nearly $10 billion higher than the same period a year earlier. A wider trade deficit could impact India’s current account balance and add to pressure on the local currency, which has been teetering around record lows against the dollar.