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Business
India's Current Account Deficit Expected to Reach 1.5% of GDP in FY27 Amid Rising Oil Prices
✍️ The Times of India
🗓 18 Jul 2026, 10:33 AM
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India's current account deficit is projected to widen to 1.5% of GDP in the fiscal year 2027, with higher oil prices weighing on the balance of payments, according to a report by The Times of India.
India’s current account deficit is set to widen to 1.5% of GDP in fiscal year 2027, up from the 1.3% recorded in FY26, a report from The Times of India indicates. The rise is largely attributed to escalating global oil prices, which have increased import bills for the country.
Higher oil costs are expected to push the trade deficit deeper, as India remains a net importer of petroleum products. The widening gap could exert downward pressure on the rupee and may prompt the Reserve Bank of India to consider tightening monetary policy.
Economists warn that a larger deficit could strain public finances and affect India’s external debt sustainability. The government may need to boost export competitiveness or adjust fiscal policy to offset the impact.
The Times of India’s analysis underscores the sensitivity of India’s balance of payments to commodity price swings and highlights the need for strategic import substitution and energy diversification.
Higher oil costs are expected to push the trade deficit deeper, as India remains a net importer of petroleum products. The widening gap could exert downward pressure on the rupee and may prompt the Reserve Bank of India to consider tightening monetary policy.
Economists warn that a larger deficit could strain public finances and affect India’s external debt sustainability. The government may need to boost export competitiveness or adjust fiscal policy to offset the impact.
The Times of India’s analysis underscores the sensitivity of India’s balance of payments to commodity price swings and highlights the need for strategic import substitution and energy diversification.