Jan trade deficit at three month high

metro india news  I new delhi

India's merchandise trade deficit widened to a three-month high of approximately $35 billion in January 2026, driven primarily by a dramatic surge in gold imports and stagnant exports, according to recent government data and market analysis. The trade deficit reached $34.68 billion for the month, up significantly from levels in previous periods and marking the widest gap since October. 

This figure aligns closely with earlier reports highlighting gold as a major factor, echoing patterns seen during seasonal demand spikes like Diwali but amplified this time by other dynamics.Imports rose sharply by about 19-20% year-on-year to around $71.24 billion. The standout contributor was gold imports, which soared to roughly $12 billion—nearly three times higher than the $2.77 billion recorded in January of the previous year and about three times the December figure. 

This represented a staggering 350% or more increase in some comparisons, with silver imports also jumping substantially to around $2 billion. Analysts noted that elevated international gold prices, combined with strong domestic demand—including record inflows into gold exchange-traded funds (ETFs)—played a key role. These ETFs, which saw massive investments comparable to equity mutual funds in recent periods, require partial backing by physical gold, further boosting import needs.