Trade deficit almost doubles in September as services exports shrink

shows that for the first half of the financial year (April to September 2025), the trade deficit shrank by 2.3%.

Data released by the Ministry of Commerce and Industry on Wednesday showed that India’s total exports stood at $67.2 billion in September 2025, up 0.8% over September 2024. Total imports, on the other hand, grew 11.3% to $83.8 billion over the same period. 

As a result, the trade deficit in September nearly doubled to $16.6 billion, compared to $8.6 billion in September 2024.

Goods exports grow despite tariffs

Notably, the relatively poor performance of the export sector was due to lower exports of services and not goods. India’s goods exports grew 6.7% to $36.4 billion in September 2025 despite that being the first full month of 50% tariffs imposed by the U.S. on imports from India. 

Services, which have so far bolstered India’s export performance, saw exports shrinking 5.5% in September 2025 to $30.8 billion.

“It is heartening to know that in this turbulence, our merchandise exports have kept up,” Commerce Secretary Rajesh Agrawal said in a press briefing. “That means our industry has been resilient and they have been able to withstand the turbulence by retaining their supply chains and business. They might be taking on some of the costs on themselves.”

Big picture

However, while the data shows that India’s exports to the U.S. are indeed 13.4% higher in the cumulative April-September 2025 period than in the same period last year, they have been declining steadily over the last few months. That is, where India’s exports to the U.S. stood at $8.8 billion in May 2025, they were valued at $5.5 billion in September 2025.

Mr. Agrawal also sought to downplay the increase in the trade deficit in September, saying that international trade does not always follow the same pattern from year to year. 

“On a cumulative basis, we are still doing better than last year,” he said. “That means the part of the exports that are not facing tariffs are growing well, but also the part of the exports that do face the tariffs are also growing. The exports have not come down.”

Looking at the first half of the financial year, the data shows that total exports grew 4.45% in the April-September 2025 period to $413.3 billion. Total imports grew at a relatively slower 3.55% to $472.8 billion over the same period. As a result, the trade deficit during the first half of the financial year shrank by 2.3%.