- By Shibra Arshad
- Mon, 17 Nov 2025 08:57 PM (IST)
- Source:JND
India’s trade deficit hit an all-time high in October 2025 as imports jumped because of strong domestic demand after the government cut consumption tax, while exports dropped sharply due to new US tariffs on the world’s fourth-largest economy.
The data released by the Ministry of Commerce and Industry on Monday, that the gap between imports and exports stood at 41.68 billion dollars last month. That is higher than the 30 billion dollars deficit forecast by economists in a Bloomberg survey. The trade deficit stood at 32.14 billion dollars in September, primarily due to the higher import of Oil and Gold.
The record trade deficit is set to pile more pressure on the already struggling rupee, Asia’s second-worst performing currency this year, down 3.5 per cent against the dollar.
The Indian currency has been hit hard by foreign investors pulling money out of stocks and uncertainty over a possible trade deal with the US. It has stayed near its all-time low of 88.8050 to the dollar since October.
Data released on Monday showed exports crashed 11.8 per cent to 34.38 billion dollars in October compared to last year, while imports surged 16.6 per cent to 76.06 billion dollars.
A major GST cut that came into effect on 22 September 2025 sparked strong festive-season spending and pushed up imports, says Bloomberg Economics. At the same time, exports to the US fell sharply, down nearly 12 per cent in September, commerce ministry figures show, after Washington slapped a 50 per cent tariff on Indian goods in August over Russia oil purchases and high Indian duties.
The latest numbers mark the second month in a row that US tariffs have hurt India’s outbound shipments. However, both countries now say they are hopeful of a deal that would lower these high tariffs soon.