India's current account deficit to double in FY26 Q2: ICRA
By yash chouhan 2025-08-20 11:51:48
India's current account deficit to double in Q2 FY26 amid rising imports: ICRA.
According to the Investment Information and Credit Rating Agency (ICRA), India's current account deficit (CAD) is projected to double to $13-15 billion in the second quarter (Q2) of FY26, up from an estimated $6-8 billion in Q1 FY26.
Meanwhile, ICRA in its August 2025 report said India's current account deficit is likely to remain stable at 0.6 per cent of GDP in FY26, in line with FY25, although risks remain due to tariff-related developments.
ICRA's estimate comes after India's merchandise exports recorded a 7.3 per cent annual growth in July 2025 to $37.2 billion, following a marginal 1.7 per cent growth in Q1 (Q1) of FY26. In contrast, merchandise imports witnessed a broader and relatively sharper growth of 8.6 per cent in July 2025, reaching $64.6 billion.
However, India's exports to the US grew in double digits for the seventh consecutive month in July 2025, taking the country's share to nearly 22 per cent from 19 per cent a year ago. The report further said that given the uncertainty over possible storage and duties in some categories, growth is likely to remain slow in the near term.
According to the Ministry of Commerce and Industry, India's merchandise trade includes export of ready-made garments of all types of textiles, engineering goods, petroleum products, electronic goods, drugs and pharmaceuticals, gems and jewellery, and a wide range of other items.
