Gold and silver shipments surge; exports inch up 0.6% amid global headwinds, with the U.S. tariff reset in focus
India’s merchandise trade deficit widened sharply to $34.68 billion in January, as a surge in gold and silver imports pushed overall inbound shipments up by 19 per cent, according to government data released on Monday.
Total imports rose to $71.24 billion in January from $63.55 billion in December, driven largely by higher purchases of precious metals. Gold imports alone jumped to $12.07 billion from $4.13 billion in the previous month, reflecting strong domestic demand and increased inflows into gold exchange-traded funds (ETFs).
Inbound investments into Indian gold ETFs nearly doubled to ₹240.4 billion ($2.65 billion) in January, necessitating higher physical gold imports to back those funds. Analysts have flagged concerns over the impact on the current account balance. Kotak Institutional Equities noted that continued large inflows into gold ETFs, along with sustained physical gold imports, could pose challenges to India’s current account deficit.
Merchandise exports, meanwhile, rose 0.6 per cent year-on-year to $36.56 billion, compared to $38.51 billion in December, amid persistent global economic uncertainties. The January trade deficit was significantly higher than the $25.04 billion recorded in December and $23.43 billion in January 2025.
Commerce Secretary Rajesh Agrawal said overall merchandise and services exports remain in positive territory. “We will be nearing $860 billion overall exports in the current fiscal,” he said, adding that cumulative exports (April–January) grew 6.15 per cent to $720.76 billion.
The January figures also mark the final month reflecting the impact of the earlier 50 per cent U.S. tariffs on Indian goods, imposed by President Donald Trump. Washington has since announced a reduction of tariffs to 18 per cent under an interim framework agreement, offering relief to Indian exporters. India’s chief trade negotiator is expected to visit the United States next week to finalise the pact.
Separately, India has signed a trade agreement with the European Union, which is expected to come into force within the next year.
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