India’s merchandise trade deficit widened to a record $41.68 billion in October, as gold imports trebled and outbound shipments registered their sharpest contraction in 14 months. The surge reversed the recent trend of narrowing deficits, raising concerns over external imbalances amid global economic uncertainties.

Merchandise imports jumped to $66.1 billion from $52.3 billion a year earlier, while exports grew only marginally to $44.3 billion, according to provisional data from the Commerce Ministry. Gold imports more than doubled, crossing $7 billion, as jewellers stocked up for Dussehra and Diwali sales, marking the peak festive season.

Gold imports surged 199.2 per cent year-on-year to $14.72 billion in October, fuelled by pent-up demand and the festival season. Silver imports rose sixfold to $2.72 billion, driven by increased shipments of plain silver from a free-trade agreement partner country, government officials said.

Analysts noted that while the seasonal jump in bullion demand is temporary, it added pressure on the rupee and may influence the Reserve Bank of India’s stance on currency management. Non-oil, non-gold imports also showed an uptick, signaling revival in domestic consumption.

Economists expect the deficit to ease in the coming months as festive purchases taper, but warn that elevated gold demand and volatile crude prices could keep the external gap above comfort levels through the December quarter.