India’s trade deficit may hit ₹2.5 lakh crore:Gold imports, weak exports could drive ₹13,000 crore spike in September

India’s trade deficit is projected to rise sharply to $28.0 billion (₹2.48 lakh crore) in September 2025, nearly ₹13,000 crore higher than August’s $26.5 billion (₹2.35 lakh crore), according to a report by Union Bank of India. The primary driver behind this surge is a sharp increase in gold imports. Despite a rise in gold prices by ₹45,363 this year, consumer demand remains robust, fueled by the ongoing festive and wedding seasons. Gold imports in September are expected to nearly double compared to August. Apart from rising imports, sluggish exports are also contributing to the widening deficit. A slowdown in global demand and delays in a trade agreement with the United States, India’s largest export market, accounting for roughly 20% of merchandise exports, have kept outbound shipments subdued. Commerce Minister Piyush Goyal and External Affairs Minister S. Jaishankar confirmed that negotiations for the first phase of the India-US trade agreement are underway and expected to conclude by November 2025. The agreement, once finalised, is likely to reduce tariffs and boost exports. What is Trade Deficit? A trade deficit occurs when a country’s imports exceed its exports during a specific period, resulting in more money leaving the country than coming in. It is also known as a negative balance of trade. This projected spike highlights the dual challenge India faces: managing rising gold imports while seeking to strengthen exports amid global economic uncertainties.