New Delhi, May 18 India’s current account deficit (CAD) is likely to be about 2.1 per cent of GDP for FY27, assuming an oil average of $85 per barrel, a report said on Monday.
The report from HDFC Bank said elevated crude and a closed Strait of Hormuz pose upside risks to forecast, adding that the recent gold import compression measures could provide some offset.
The bank said that raising import duty to curb gold imports could trim the deficit, estimating a 20 per cent decline in gold volumes might reduce the CAD by 10 basis points.
India’s merchandise trade deficit widened to $28.4 billion in April 2026 as strong growth in imports outpaced the rise in exports.
India's import bill rose 10 per cent y-o-y, driven by higher gold imports and stronger core imports such as electronics.
The bank said that services exports showed healthy momentum, rising 13.4 per cent in April as net services exports expanded to $20.6 billion, which helped narrow the combined goods and services deficit to $7.8 billion.
Oil import bill inched moderately to $18.6 billion in April, with the price of India’s crude import basket elevated at about $114 per barrel, the bank noted.
In terms of securing supply, with supply constraints due to the closure of the Strait, India increased procurement of Russian Urals following the temporary waiver of US sanctions.
Oil exports rose 34 per cent year‑on‑year, which played a major part in keeping the net oil import bill moderate.
The report highlighted shifting trade patterns as a result of West Asia disruptions, with imports from Saudi Arabia up 30.3 per cent while shipments from the UAE, Qatar, Kuwait and Iraq fell sharply.
Exports to the UAE contracted by 36 per cent YoY, while exports to Singapore surged by 180 per cent, suggesting partial rerouting of trade flows through alternative transshipment hubs.
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