India‘s Trade Performance in October 2025: Navigating Tariffs and Festiveโฃ Demand
Recent trade data reveals aโ complex picture forโฃ India, with exportsโ facing headwinds from U.S. tariffs while imports surged, largely driven by gold and silver purchases coinciding with the festival season.โฃ This analysis examines the key factors influencing India’s trade performance in October 2025 and looksโ ahead to โpotential future trends.
Export Challenges Due to โU.S. Tariffs
Indian exporters areโข struggling under the โweight ofโข 50% tariffs imposed by the U.S. While October 2025 saw a โslight increase in exports to the U.S. compared to September, they were still 8.6% lower than in octoberโ ofโ the previous year, demonstrating the significant impact of theseโ tariffs.Several labor-intensive sectors experienced considerable export contractionsโฃ in october: โคleather and leather products (-15.7%), gems and jewelry (-29.5%), โorganic and inorganic chemicals (-21%), engineering goods (-16.7%), cotton โคyarn (-13.3%), man-made yarn (-11.8%), and jute (-27.8%). The U.S. is a major importer ofโค these goods, makingโ them notably vulnerable to the tariff impact. โข
exporters are actively seekingโฃ to diversify into new markets, โคbut establishingโฃ new supply chains requires time, suggesting continued challenges in the near term.
Import โSurge Driven by Gold and Silver
India’s total imports jumped nearly 15% in October โ2025, 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 fueledโข byโ a dramatic increase in gold imports, which nearlyโฃ tripled, rising to $14.7 billion from $4.9 billionโข in October 2024.
This jump reversed a previous โฃtrend seen duringโค April-September 2025,where gold imports were actually 8.7% lower than the same periodโค last year,despite a 22% increase in gold prices. However,the concentrated festival period – including โDhanteras and Deepawali – falling โคentirely within October led to a surgeโ in โฃgold purchases,driven by India’s strong cultural affinity for โฃtheโ metal. Silverโ imports also experienced a substantial โincrease, growing nearly 530% to $2.7 billion,โ thoughโข from a smaller base.
looking Ahead: Potential for โBetterment and Continued Volatility
The outlook for India’s trade is mixed.On the export side, continued pressure is expectedโ as long as the 50% โคtariffs remain in affect. Though, recentโข developments offer a glimmerโ ofโค 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 โtranche of the BTA, which had stalled after the tariffs were imposed, is a positive โsign. โข resolving the tariffโ issue within this initial agreement could pave the way for โคa strong recovery in India’s merchandise exports.
Regarding imports, the exceptionally high levels of goldโฃ and silver importsโ seen in October are unlikely to be sustained in the coming months. โHowever,there are โฃindications that Indian investors areโข increasingly using gold as a hedge against currency risk,which could โฃkeepโ gold imports elevated,albeit not to the sameโ extent as October.
The Export Import Bank of India (Exim Bank) forecastsโ 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.