India’s current account deficit (CAD) could widen to around 2 percent of GDP in FY27 if global crude oil prices remain elevated in the range of USD 82–87 per barrel, according to a report by CRISIL.
The ratings agency said higher oil prices would significantly increase India’s import bill, putting pressure on the trade balance and widening the external deficit despite steady growth in services exports and remittance inflows. India, which imports more than 80 percent of its crude oil requirements, remains highly sensitive to global energy price movements.
CRISIL noted that sustained geopolitical tensions, supply disruptions, or production curbs by major oil-producing nations could keep crude prices elevated through FY27, creating risks for macroeconomic stability. A higher CAD may also add pressure on the rupee and complicate inflation management.
However, the report added that strong foreign exchange reserves, robust capital inflows, and resilient domestic demand would help cushion the impact of a wider deficit.
India’s CAD has remained manageable in recent years, supported by services exports led by IT and business services, along with consistent remittance inflows from overseas Indians. Analysts say the trajectory of crude oil prices will remain a key determinant of India’s external sector outlook in FY27.