New Delhi: India’s trade deficit is heading toward a worrying new mark. A latest report from the Union Bank of India estimates that the country’s trade gap may reach $28 billion (Rs 2.48 lakh crore) in September 2025, marking a sharp rise of nearly Rs 13,000 crore from August’s figure of $26.5 billion (Rs 2.35 lakh crore). The trigger lies not in oil or electronics this time, but in gold – a metal India can never seem to get enough of.
Gold imports have nearly doubled despite soaring global prices. In just one month, India’s appetite for the yellow metal has grown larger because of festivals and the upcoming wedding season. The surge in domestic demand has outpaced expectations, showing once again how strongly gold is tied to Indian sentiment and culture.
Economists tracking the numbers say the rally in prices, about Rs 45,000 higher this year, has done little to deter buyers. Markets in Ahmedabad, Surat, Delhi and Chennai are buzzing again, with jewellers working overtime to keep up with orders. The shine of gold remains irresistible, and its ripple effect is now visible on India’s trade books.
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But the concern runs deeper. India’s exports have slowed to a crawl. The global slowdown has weakened demand for Indian goods, from textiles to machinery.
Analysts also point to the delay in the India-US trade agreement, which has further dampened growth. The United States remains India’s single-largest buyer, accounting for around 20% of total merchandise exports. The drag in talks has therefore weighed heavily on India’s export momentum.
Commerce Minister Piyush Goyal and External Affairs Minister S. Jaishankar have confirmed that negotiations for the first phase of the bilateral trade deal are ongoing. Discussions are expected to continue until November 2025. If the deal materialises, tariff cuts could help India’s exports gain fresh traction in the American market.
The widening trade deficit, however, highlights a recurring challenge. When a country imports more goods than it exports, the outflow of foreign currency rises. This situation, known as a trade deficit, shows that India is spending more abroad than it earns through exports.
Economists also call it a negative balance of trade, a sign that the economy’s external account is under pressure.
As the festive months continue and the world’s second-largest gold consumer buys even more, India’s trade gap could deepen further. For now, the glitter of gold has come with a costly price tag, one that the nation’s balance sheet will soon reflect.
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