| Trade policy uncertainty stayed unusually high through 2025 despite some easing from new trade agreements. The index fell sharply from its April peak but remained far above last year’s levels, reflecting the lack of durable, transparent global arrangements. Frontloaded orders boosted trade yet fragmentation and delayed transmission of announced tariffs—due to stockpiling, pauses and rerouting—limited broader gains. Global trade growth is expected to soften, rising 3.6% in 2025 before slowing to 2.3% in 2026, below the pace of 2024.
From April–October FY26, India maintained steady trade momentum: overall exports rose 4.8% YoY, supported by strong services growth of 9.7% and a sizable services surplus. Merchandise exports improved modestly, with non-petroleum, non-gems, and jewellery categories showing firmer growth. Imports increased 5.7%, driven by robust domestic demand and higher non-petroleum, non-gems, and jewellery inflows, while petroleum imports fell on softer crude prices. The period ended with a trade deficit of USD 78.2 billion.
October 2025 data signalled cooling momentum as merchandise exports fell 11.8% while imports surged 16.6%, largely due to soaring gold and silver inflows amid sharply higher prices. This widened the merchandise deficit to USD 41.7 billion. Even so, services remained a bright spot: exports hit a record USD 38.5 billion, services imports grew moderately, and the monthly services surplus climbed nearly 16%, continuing to cushion overall trade performance.
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