India’s merchandise trade deficit (MTD) moderated to a 5-month low of $24.5 billion in November 2025 from an all time high $41.7 billion in October 2025 and $31.9 billion in the year-ago month. This was attributed to the normalisation of supply after the holidays and moderation in demand for items like gold, and silver post the festive season. 

Notwithstanding the sharp compression in November 2025, the average MTD of $33.1 billion in October November 2025 exceeded the ~$29 billion each seen in Q2 FY2026 and October-November 2024. Consequently, India’s current account deficit (CAD) is projected to widen to $20-24 billion in Q3 FY2026 from $11-12 billion each in Q3 FY2025 and Q2 FY2026. Overall, the CAD/GDP is expected to print at 0.8% in FY2026 (0.6% in FY2025).

EXHIBIT: Trends in India’s merchandise exports and imports

Source: Ministry of Commerce and Industry, GoI; ICRA Research