Excessive dependence: On India’s external trade landscape

India’s record goods trade deficit in October ($41.68 billion) follows a sequential build-up from September ($32.15 billion), reflecting a disturbing turn in its external trade landscape. The shock from the U.S.’s tariffs has been largely responsible — a full 50% levy that came into effect in August — at a time when the U.S. had become India’s largest single export market (since about 2018-19). But the main cause of the 11.8% year-on-year (YoY) drop in goods exports to $34.38 billion ($38.98 billion in October 2024) and the precipitous rise in imports lies in a record surge in precious metal inflows. Gold imports nearly tripled from last October ($4.92 billion) and inbound silver rose more than fivefold. This suggests that the bullion surge is not merely seasonal but also a hedge against g