File photo Photocredit: Anita Kumari
The shortage of the current account of India is expected to almost double in the FY26, which rises to 1.2 percent of GDP of 0.6 percent in FY25, said Union Bank of India in a report. The estimate entails an upward risk, driven by evolving trade dynamics and global raw material prize movements.
“We see an upward risk for our estimation for the current account (C/A) for FY26 BBP. We expect higher; almost double versus last year from broadening in C/A deficiency in FY26 to 1.2 percent in the GDP compared to a 0.6 percent in FY25,” the report added. The report added that geopolitical developments, including tariff problems and possible trade agreements between India and the US or Europe, are expected to play an important role in shaping trade dynamics.
The oil prices remain a key factor, with estimates that suggest that every $ 10 per barrel movement in oil prices could influence the annual balance in the current account of around $ 15 billion. Lower oil prices can support the balance in the current account, given the high sensitivity, added the report. The report of the Union Bank of India added that, despite the expected broadening of the deficit, the total position is being held in the current account, it is expected to remain manageable.
This is supported by a highly invisible surplus, powered by a robust trade surplus of $ 188.75 billion in FY25. In comparison with a shortage of oil import of $ 122.45 billion for the same period.
The trade deficit of India was greatly expanded in Jul’25, up to $ 27.35 billion in July of the current year, compared to $ 18.78 billion a month ago levels for the last time in November 2024-driven by Standardization in Import after a temporary Blip last month, even if the theme of export of exports continues. The pace of import growth, in particular in fossil fuels and capital goods, considerably surpassed the export profits, which resulted in an imbalance and rising concern about sustainability in the midst of shifting worldwide trading dynamics. In terms of sub-segments, trading dynamics were widely powered in July25 by broadening all three large companies.
Non-Oil (non-oil, non-gold) trade deficit saw the sharpest increase, rose to $ 12.28 billion from $ 7.83 billion in June’25.
The shortage of the oil trade also expanded and reached $ 11.24 billion compared to $ 9.19 billion the last month. In the meantime, the golden trade deficit almost doubled to $ 3.83 billion out of $ 1.76 billion in June’25.
Trade surplus for services saw a light mother decrease, after an upward revision of the data from June. The business surplus of the services illuminated last month to $ 15.63 billion in Jul’25 compared to $ 16.21 billion, versus an average $ 15.88 billion in April-Jul’25, which was $ 13.59 billion in the same period last year. The total trade deficit (goods and services combined) stood up to double digits in Jul’25, up to $ 11.72 billion, compared to $ 2.57 billion last month.
Published on August 17, 2025
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