India’s Current Account Deficit Projected to Widen to 1.5% of GDP in FY27: Crisil

India’s current account deficit (CAD) is projected to increase to 1.5% of gross domestic product (GDP) in FY27, compared with 0.6% in FY26, according to Crisil’s Trade First Cut report for July 2026.

The expected deterioration in India’s external balance is primarily attributed to higher crude oil and commodity prices. Crisil noted that oil imports continue to be the largest contributor to the country’s merchandise trade deficit, making the current account particularly sensitive to changes in global energy prices.

The ratings agency expects crude oil prices to average between $82 and $87 per barrel during FY27, substantially above the previous financial year’s average of $70.3 per barrel. Higher energy costs could raise India’s import bill and place additional pressure on the current account.

Crisil also highlighted uncertainty surrounding the crude oil outlook amid continuing geopolitical tensions in West Asia. It stated that the durability of the interim geopolitical arrangement would require close monitoring, as renewed disruption could affect oil prices and global supply conditions.

The projection follows the release of official trade figures showing that India’s merchandise trade deficit expanded to $30.4 billion in June 2026. This compares with $28.2 billion in May 2026 and $19.1 billion in June 2025. The widening was driven by imports growing faster than exports. CA Sansaar