Gold, Silver Rush Widens India’s October Trade Deficit Despite Strong Overall Outlook

India's trade deficit in October 2025 widened sharply, driven primarily by an extraordinary jump in gold and silver imports, according to Commerce Secretary Rajesh Agrawal.

The spike, led by festive-season demand and rising global prices, added significant pressure to the month's trade numbers even as cumulative performance for the fiscal year remains stable.

Agrawal said gold imports soared 199.2% in October, touching $14.7 billion compared to $4.9 billion in the same month last year.

This alone added an extra $9.8 billion to India's import bill. Despite high international gold prices, India saw strong festive buying and pent-up consumer demand ahead of Diwali, contributing heavily to the surge.

Silver imports also registered an unusual rise. Officials attributed this to two key factors: a jump in global silver prices and a spike in industrial demand, particularly from sectors such as solar energy, where silver plays a critical role as a conductive material. The combination of ballooning gold and silver inflows pushed the monthly trade deficit significantly higher.

"Gold imports have spiked despite high global prices, and we've had a very good Diwali season," Agrawal noted. "Silver imports have also grown. When combined, these two categories explain the additional deficit. But on a cumulative basis, we're still good."

Beyond these reasons, officials expect the deficit to normalise in the coming months once festive-driven demand tapers and metal prices ease.

Despite the October spike, officials remain confident that India's external sector fundamentals remain strong, supported by resilient services exports and stable capital inflows.