Authorship notes: Kumar and Karkun of the Pahle India Foundation contributed to the analysis.

Three overlapping shocks defined the month: a surge in gold imports as a hedge against inflation and uncertainty, tariff-led declines in exports to the US hit textiles, engineering goods, and gems and jewelry, and volatile capital flows with FDI rising to $81 billion while FIIs pulled out $24 billion, putting pressure on the rupee.

Despite headwinds, India's growth remains steady in the 6–7% range with inflation near a historic low and a current account deficit of about 1.2% of GDP, signaling resilience rather than crisis.

The piece argues for shifting from reactive protectionism to proactive, competitiveness-led reform, using October's turbulence as a catalyst to redefine India’s external strategy.

A disinflationary trend allowed the RBI to cut policy rates by 100 basis points, though the risk of imported inflation lingers if the rupee weakens or oil prices rise.

Two stabilisers mitigated systemic risk: services exports rose 11.9% to $38.5 billion, partially offsetting the goods deficit, and remittances reached about $135 billion (roughly 3.5% of GDP), providing stable, diversified inflows.

Five strategic imperatives for strengthening external resilience: diversify exports via new FTAs with Southeast Asia, the EU, and Africa; financialise gold demand through sovereign bonds and digital instruments; elevate services as a major export driver with targeted infrastructure and branding; transform remittances into strategic capital through labor-mobility accords; and expand value-added manufacturing exports in electronics, chemicals, defense, renewables, and pharma to climb the value chain.

October trade data showed a record merchandise deficit of $41.7 billion, driven by a near 200% jump in gold imports and a 37.5% drop in exports to the US as tariffs rose from 10% to 50%.