India’s balance of trade (BoT) for November 2025 posted a deficit of INR -87.40 billion, a sharp deterioration from October’s INR -41.70 billion and well below the 12-month average deficit of approximately INR -29.50 billion, according to the Sigmanomics database. This represents a near doubling of the trade gap in just one month, signaling intensifying external pressures.

Drivers this month

• Import bill surged due to higher crude oil prices and intermediate goods.
• Exports remained steady but failed to keep pace with rising imports.
• Geopolitical tensions in key supply chains disrupted trade flows.

Policy pulse

The Reserve Bank of India (RBI) is likely to weigh this widening deficit against inflation targets. The trade deficit adds to imported inflation risks, potentially prompting tighter monetary conditions in the near term.

Market lens

Immediate reaction: The Indian rupee (INR) weakened by 0.40% against the US dollar within the first hour of the release, reflecting concerns over external imbalances and capital outflows.

The November BoT deficit of INR -87.40 billion contrasts sharply with the previous month’s INR -41.70 billion and is the largest since May 2025, when the deficit was INR -26.40 billion. Over the past 12 months, the average monthly deficit hovered near INR -29.50 billion, underscoring the unusual magnitude of the current gap.

Core macroeconomic indicators

• Crude oil prices rose 8% MoM, inflating import costs.
• Export growth slowed to 2.10% YoY, below the 6% average of the past year.
• Industrial production grew 4.50% YoY, sustaining import demand for capital goods.

Monetary policy & financial conditions

The RBI’s policy rate remains at 6.50%, with inflation at 6.10% YoY, above the 4% target. The widening trade deficit may complicate inflation control efforts, as imported inflation pressures mount.

Fiscal policy & government budget

Fiscal prudence continues with a deficit target of 5.90% of GDP for FY2025-26. However, higher import costs could widen the current account deficit, pressuring government borrowing costs and fiscal space.

Drivers this month

• Energy imports increased by 15% MoM due to higher crude prices.
• Non-oil imports rose 7%, driven by machinery and electronics.
• Export volumes grew marginally by 1.80% MoM but failed to offset import growth.

Policy pulse

The RBI’s inflation targeting framework faces challenges as imported inflation risks rise. The central bank may consider further rate hikes or liquidity tightening to anchor inflation expectations.

Market lens

Immediate reaction: The INR depreciated sharply, while 2-year government bond yields rose 15 basis points, reflecting market concerns over external financing risks and inflationary pressures.

Looking ahead, India’s balance of trade trajectory depends on global commodity prices, domestic demand, and geopolitical developments. The following scenarios outline potential paths:

Scenario analysis

• Bullish (30% probability): Global energy prices stabilize or decline, exports accelerate due to improved global demand, narrowing the deficit to INR -40 billion by Q1 2026.
• Base (50% probability): Imports remain elevated due to sustained commodity prices, exports grow modestly, keeping the deficit near INR -70 to -90 billion in the near term.
• Bearish (20% probability): Geopolitical shocks disrupt supply chains, crude prices spike further, and export demand weakens, pushing the deficit beyond INR -100 billion.

Structural & long-run trends

India’s trade deficit has historically fluctuated with energy prices and global demand cycles. Structural reforms aimed at boosting manufacturing exports and reducing import dependence on energy and electronics remain critical to long-term external balance.

External shocks & geopolitical risks

Ongoing geopolitical tensions in the Middle East and East Asia pose risks to energy supplies and trade routes. Any escalation could exacerbate import costs and disrupt export markets.

The November 2025 balance of trade data from the Sigmanomics database highlights a significant external challenge for India. The sharp widening of the deficit underscores vulnerabilities to global commodity price swings and geopolitical risks. Policymakers face a delicate balancing act between supporting growth and containing inflationary pressures.

Fiscal discipline and structural reforms will be key to mitigating risks. Meanwhile, financial markets are likely to remain sensitive to trade data, influencing currency and bond yields. Close monitoring of global developments and domestic demand trends will be essential in the coming months.

Key Markets Likely to React to Balance of Trade

The balance of trade is a critical indicator for currency, bond, and equity markets in India. Movements in the trade deficit often correlate with fluctuations in the Indian rupee, government bond yields, and export-oriented stocks. Below are five tradable symbols historically sensitive to India’s trade dynamics:

• USINR – The USD/INR currency pair typically reacts to trade deficit changes, with deficits often weakening the rupee.
• RELIANCE.NS – Reliance Industries is a major importer of crude oil; its stock price is sensitive to energy price-driven trade deficits.
• TCS.NS – Tata Consultancy Services represents India’s export sector; its performance often correlates with export trends.
• BTCUSD – Bitcoin’s price can reflect broader risk sentiment influenced by macroeconomic shocks including trade imbalances.
• EURINR – The Euro/INR pair also reacts to trade and capital flow shifts, especially with Europe as a key trade partner.

Insight: Balance of Trade vs. USINR Exchange Rate Since 2020

Since 2020, India’s balance of trade deficits have shown a strong correlation with the USD/INR exchange rate. Periods of widening deficits, such as mid-2021 and late 2025, coincided with rupee depreciation. The chart below illustrates this relationship, highlighting how external imbalances pressure currency markets. This dynamic underscores the importance of trade data for forex traders and policymakers alike.

Year	Avg Monthly BoT Deficit (INR B)	USD/INR Avg Rate
2020	-22.50	74.30
2021	-35.70	74.90
2022	-28.10	75.10
2023	-30.40	76.20
2024	-29.90	77.00
2025 (YTD)	-31.20	78.50

FAQs

What is the current balance of trade for India?

The latest balance of trade for India in November 2025 is a deficit of INR -87.40 billion, reflecting a sharp increase from the previous month.

How does the balance of trade impact the Indian economy?

The balance of trade affects currency valuation, inflation, and external financing. A widening deficit can pressure the rupee and increase inflation through higher import costs.

What are the key risks facing India’s trade balance?

Risks include volatile global commodity prices, geopolitical tensions disrupting supply chains, and slower export growth amid global economic uncertainties.

Final Takeaway

India’s November 2025 trade deficit surge highlights rising external vulnerabilities. Policymakers must balance inflation control with growth support amid uncertain global conditions.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.

Updated 12/1/25

Sources

1. Sigmanomics database, Balance of Trade India, November 2025 release.
2. Reserve Bank of India, Monetary Policy Reports 2025.
3. Ministry of Commerce and Industry, India Trade Statistics 2025.
4. International Energy Agency, Crude Oil Price Data 2025.

Selected Tradable Symbols

• USINR – Indian rupee exchange rate sensitive to trade deficits.
• RELIANCE.NS – Major importer of crude oil, impacted by energy price-driven trade gaps.
• TCS.NS – Export-oriented IT services firm, reflecting export sector health.
• BTCUSD – Proxy for risk sentiment affected by macroeconomic shocks.
• EURINR – Euro to INR exchange rate, sensitive to trade and capital flows.