New Delhi, Nov 22 India’s trade momentum remains firm despite global volatility, and the current account is expected to slip into a modest deficit before turning into positive territory, a report said on Saturday.
The report from SBI Research forecasts that the current account deficit (CAD) will be about 1.8 per cent and 2.8 per cent of GDP in Q2 and Q3 FY26, respectively, before it will turn into the positive territory in Q4 FY26.
It projects a full fiscal‑year deficit of roughly 1–1.3 per cent and a marginal overall balance‑of‑payments deficit of up to $10 billion for FY26.
"Even though balance of payments (BOP) will turn negative in FY26, the alarm bells that are being sounded regarding its impact on rupee movements seems to be a little overblown at this point," the report said.
India’s total merchandise exports in April to September of FY26 inched up 2.9 per cent to $220 billion, with shipments to the US growing 13 per cent to $45 billion despite front‑loading effects and a decline in the US share of exports since July 2025.
SBI Research stated that marine products and RMG cotton witnessed positive growth during April-September period.
The share of India’s merchandise exports to other countries during this period has increased significantly indicating the diversification of our exports basket with the UAE, China, Vietnam, Japan and Hong Kong, as also Bangladesh, Sri Lanka and Nigeria being among the top destinations across different product categories, the report noted.
SBI Research highlighted government-led measures to support exporters including approval of Rs 45,060 crore, including Rs 20,000 crore in credit guarantees on bank loans.
The move is aimed at enhancing the global competitiveness of Indian exporters and support diversification into new and emerging markets.
The report noted that the rupee's tail spin past 89.49 only reflected global market turmoil, dollar index gaining momentum, and does not indicate structural implications for currency strength.
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