India's October Trade Deficit Hits One-Year High of $39.88 Billion
Higher gold and energy import bills pushed India's October merchandise trade deficit to $39.88 billion, its widest level in a year, according to government data reported by Reuters. The gap exceeded economists' $32.25 billion forecast in a Reuters poll and rose from $30.21 billion in September, though it stayed below the record $42.58 billion deficit logged in October 2025.
Gold and Petroleum Import Surge
Gold imports more than tripled month-on-month to $5.51 billion in October from $1.8 billion in September, according to Reuters. Petroleum product imports, mainly crude oil, jumped 54.31% year-on-year to $22.82 billion during the month, Reuters reported. The government estimated India's average crude basket neared $120 per barrel before Brent crude futures eased to around $95 per barrel. Total merchandise imports climbed to $89.35 billion in October from $74.61 billion in September. Freight rates for crude shipments from the UAE's Fujairah port to India's west coast surged 377% to $7.51 per barrel in October 2026, up from $1.57 per barrel in late February, according to ThePrint. India's gold imports fell to USD 5.51 billion in October 2026 from USD 14.72 billion in October 2025, according to PSU Watch. Higher freight costs increase the delivered price of imported crude for India, lengthen inventory cycles, and raise refiners' working capital requirements, according to ThePrint.
Record Merchandise Exports and Services Surplus
Merchandise exports reached a monthly record of $49.47 billion in October, up from $44.4 billion in September, Reuters reported. Commerce Secretary Rajesh Agrawal said merchandise exports grew 45.03% year-on-year while overall exports of goods and services rose nearly 30% to $89.99 billion, according to The Hindu. Combined imports of goods and services totalled $110.07 billion, narrowing the overall trade deficit in October to $20.1 billion from $25.1 billion a year earlier, The Hindu reported. The trade ministry estimated October services exports at $40.51 billion and services imports at $20.72 billion, yielding a $19.79 billion services surplus. In October 2026, Engineering Goods exports grew 36.01% to US$ 12.74 billion, while Gems & Jewellery exports rose 40.06% to US$ 3.21 billion, according to Press Information Bureau (Ministry of Commerce & Industry). Petroleum Products exports climbed 140.21% to US$ 8.89 billion in October 2026, with Electronic Goods exports increasing 62.70% to US$ 6.64 billion, according to Press Information Bureau (Ministry of Commerce & Industry).
Cumulative Totals and Regional Trade Shifts
Between April and October, overall exports increased 16.66% year-on-year to $568.84 billion and overall imports rose 16% to $662.19 billion, widening the cumulative seven-month deficit to $93.35 billion from $83.25 billion a year earlier, according to Reuters. A trade ministry official said exports to the United States rose to $59.52 billion from $51.99 billion in the same period, while exports to Africa climbed 44% between April and September to $31.4 billion, Reuters and The Hindu reported. The Hindu added that October shipments to West Asia stood at $5.7 billion in exports and $16.2 billion in imports, with traders using Omani ports as well as Fujairah and Khor Fakkan to bypass the Strait of Hormuz.