India's current account deficit likely to widen to 1.5% of GDP in FY27 as higher oil prices weigh: Report

India's current account deficit is projected to widen to 1.5% of GDP in FY27 from 0.6% in FY26, according to Crisil's 'Trade First Cut' report.

Higher crude oil and commodity prices are the main drivers of the widening merchandise trade deficit, with Crisil expecting oil prices to average $82-87 per barrel in FY27.

The merchandise trade deficit widened to $30.4 billion in June, up from $19.1 billion a year ago, as imports grew 31% year-on-year while exports grew 15.5%.

Crude oil imports increased 40% year-on-year in June, while core imports (excluding oil and gems) rose 31.4%, led by electronic goods, machinery, and chemicals.

The services surplus narrowed in June but continues to cushion the external account; geopolitical tensions in the Middle East add uncertainty to the oil price outlook.