New Delhi, June 18: India’s current account deficit (CAD) is projected to widen to around 2.2% of GDP in FY27, driven primarily by sustained high global crude oil prices and increased import-related pressures, according to recent macroeconomic assessments.
Analysts say the outlook reflects continued vulnerability to global energy price fluctuations, as India remains a major importer of crude oil to meet domestic consumption needs. Higher oil prices are expected to keep the import bill elevated, thereby widening the trade gap in the external sector.
While the CAD is likely to increase, strong performance in services exports—especially IT and business services—along with steady remittance inflows are expected to partially offset the pressure on the external account.
Experts also point out that global geopolitical uncertainties and commodity price volatility remain key risks that could further influence India’s external balance in FY27.
Despite the projected widening, India’s healthy foreign exchange reserves and stable capital inflows are expected to provide a cushion against external shocks, supporting overall macroeconomic stability.
Economists emphasize the importance of energy diversification and prudent external sector management to contain risks arising from volatile global oil markets.
