India's current account deficit to touch 1.2% in FY26: Report
India's current account deficit (CAD)—basically the gap between what we earn and spend with the world—is expected to nearly double from 0.6% of GDP in FY25 to 1.2% in FY26, says a new Union Bank of India report.
The main reasons? Shifting trade patterns, unpredictable global prices (especially for oil), and potential trade agreements with the US and Europe.
Trade deficit swelled to $27.35 billion in July
July 2025 saw India's trade deficit jump to $27.35 billion as imports—mainly fossil fuels and capital goods—rose sharply.
Oil prices have a big impact here: just a $10 per barrel swing can impact the annual current account balance by approximately $15 billion.
Even services, which usually help balance things out, posted a slightly lower surplus last month.
All this highlights why boosting exports and staying competitive globally matters more than ever for India right now.