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India's current account deficit (CAD) will likely rise to 2.2 per cent of the gross domestic product (GDP) from 0.6 per cent in fiscal 2026 as Brent crude price will likely average USD 90-95 per barrel this fiscal, nearly 32 per cent higher than in fiscal 2026 higher oil prices, says Crisil.
India's merchandise trade deficit increased to USD 28.2 billion in May 2026 from USD 22.6 billion a year ago, with the exports facing a "broad-based 18 per cent acceleration on-year to USD 45.2 billion in May, compared with 13.8% to USD 43.6 billion in April." Petroleum exports increased 54.9 per cent as against 34.6 per cent and core exports 12.3 per cent (USD 34.2 billion) as compared with 10.4 per cent (USD 31.6 billion). "The on-year jump in petroleum exports was due to a statistical low-base effect and reflected the 66.2% on-year increase in Brent crude prices in May," Crisil noted. On a sequential basis, India's oil exports dropped to "USD 8.4 billion in May from USD 9.6 billion in April, led by lower crude oil prices on-month, after the extraordinary surge in the past two months on account of the conflict in West Asia," it said. At the same time, Brent crude price averaged USD 107.1 per barrel in May, down 8.7 per cent vs April, noted Crisil. According to Crisil, higher oil prices will likely "exert greater pressure on the CAD." "Crisil Intelligence expects Brent crude price to average USD 90-95 per barrel this fiscal, ~32 per cent higher than in fiscal 2026. Oil remains the biggest source of the goods trade deficit (36 per cent in fiscal 2026)," the report said. Despite the expected resolution of geopolitical uncertainties in West Asia "energy prices are expected to remain elevated on-year as it will take several months for supplies to normalise fully. Goods exports, too, will have to navigate lingering global trade disruptions," said Crisil. "For the current fiscal, we project the current account deficit (CAD) to rise to 2.2% of the gross domestic product (GDP) from 0.6% in fiscal 2026," said Crisil. (ANI)
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