India’s October Merchandise Trade Deficit Widens to One-Year High of $39.88 Billion as Imports Surge
- On Friday, India's merchandise trade deficit widened to a one-year high of $39.88 billion in October. "India recorded its highest-ever monthly goods exports in October 2026," Trade Secretary Rajesh Agrawal said while releasing the figures.
- Inbound shipments jumped 19.7% in October, outpacing the 11.4% growth in exports. Imports surged to $89.35 billion from $74.61 billion in September, resulting in a wider trade gap despite record export performance.
- India imports nearly 85% of its crude oil needs, significantly impacting the trade balance. Persistent disruptions in the global energy market from the Middle East conflict have spiked import costs.
- The Reserve Bank of India raised the repo rate to 5.50% in October, shifting its monetary policy stance to calibrated tightening. The RBI also projected 7.1% real GDP growth and 5.2% inflation for FY27.
- New Delhi has implemented trade deals with the UK and New Zealand this year to diversify export markets. A landmark agreement with the European Union is expected to be implemented early next year.
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India’s Trade Deficit Hits $39.88 Billion as Imports Surge to Record Levels
India's merchandise trade deficit climbed to a one-year high of $39.88 billion in October as imports grew significantly faster than exports. Despite achieving record monthly merchandise exports, rising energy costs and heavy reliance on imported oil continued to weigh on the country's trade balance.
India's Trade Deficit Widens as Festive Demand Boosts Imports
India's exports jump 29.9% to $89.99 billion in October; overall trade deficit narrows
India's export growth shot up by almost 30 percent year-on-year, reaching close to $90 billion in October 2026. Merchandise exports accounted for a significant $49.47 billion, marking a record high for monthly goods. Though imports also climbed, resulting in a trade deficit of $39.88 billion, the services sector helped mitigate this, supported by recent trade agreements with the UK, New Zealand, and forthcoming EU discussions.
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