India‘s Trade Performance in October 2025: Navigating Tariffs and Festive Demand
Recent trade data reveals a complex picture for India, with exports facing headwinds from U.S. tariffs while imports surged, largely driven by gold and silver purchases coinciding with the festival season. This analysis examines the key factors influencing India’s trade performance in October 2025 and looks ahead to potential future trends.
Export Challenges Due to U.S. Tariffs
Indian exporters are struggling under the weight of 50% tariffs imposed by the U.S. While October 2025 saw a slight increase in exports to the U.S. compared to September, they were still 8.6% lower than in october of the previous year, demonstrating the significant impact of these tariffs.Several labor-intensive sectors experienced considerable export contractions in october: leather and leather products (-15.7%), gems and jewelry (-29.5%), organic and inorganic chemicals (-21%), engineering goods (-16.7%), cotton yarn (-13.3%), man-made yarn (-11.8%), and jute (-27.8%). The U.S. is a major importer of these goods, making them notably vulnerable to the tariff impact.
exporters are actively seeking to diversify into new markets, but establishing new supply chains requires time, suggesting continued challenges in the near term.
Import Surge Driven by Gold and Silver
India’s total imports jumped nearly 15% in October 2025, reaching $94.7 billion.While services imports saw a modest increase of 8.1%, merchandise imports rose substantially by 16.7%. This surge was primarily fueled by a dramatic increase in gold imports, which nearly tripled, rising to $14.7 billion from $4.9 billion in October 2024.
This jump reversed a previous trend seen during April-September 2025,where gold imports were actually 8.7% lower than the same period last year,despite a 22% increase in gold prices. However,the concentrated festival period – including Dhanteras and Deepawali – falling entirely within October led to a surge in gold purchases,driven by India’s strong cultural affinity for the metal. Silver imports also experienced a substantial increase, growing nearly 530% to $2.7 billion, though from a smaller base.
looking Ahead: Potential for Betterment and Continued Volatility
The outlook for India’s trade is mixed.On the export side, continued pressure is expected as long as the 50% tariffs remain in affect. Though, recent developments offer a glimmer of hope. Trade tensions between India and the U.S. appear to be easing,with both countries concluding the sixth round of negotiations for a Bilateral Trade Agreement (BTA) in October. Resumption of discussions about concluding an initial tranche of the BTA, which had stalled after the tariffs were imposed, is a positive sign. resolving the tariff issue within this initial agreement could pave the way for a strong recovery in India’s merchandise exports.
Regarding imports, the exceptionally high levels of gold and silver imports seen in October are unlikely to be sustained in the coming months. However,there are indications that Indian investors are increasingly using gold as a hedge against currency risk,which could keep gold imports elevated,albeit not to the same extent as October.
The Export Import Bank of India (Exim Bank) forecasts that India’s merchandise exports will reach $114.2 billion in the October-December 2025 quarter, representing a year-on-year growth of 5%.
Published November 23, 2025 01:29 am IST.
