India recorded its largest merchandise trade deficit ever in October, reaching 41.7 billion USD as gold imports rose to the sky and exports to America fell due to the new 50% tax. The amount of gold imported increased by 200% compared to the same period, reaching 14.7 billion USD, while people bought an additional approximately 11 billion USD worth of gold during the festival season, causing total import value to surge.
In terms of exports, shipments to America fell by 8.5% to 6.3 billion USD, marking the second consecutive month of decline. Key sectors such as gemstones, jewelry, technical goods, textiles, cotton, and fibers all saw double-digit decreases. Although exports to China rose by 42%, this increase was not enough to offset the decline from America. Analysts forecast that gold imports will cool down after the holiday season, but warn that the current account deficit could rise to 2.4%–2.5% of GDP in Q3 FY26 and remain high if America does not withdraw the taxes.
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