Friday, July 18, 2025 | 10:25 PM ISTहिंदी में पढें
Business Standard
Notification Icon
userprofile IconSearch

India's current account deficit manageable, but financing needs monitoring

The spectre of higher tariffs imposed by the US means export prospects, including for India, will be subdued in 2025

Current Account Deficit, CAD, Indian Economy
premium

We expect crude prices to settle lower, around $65-70 per barrel, compared with $79 per barrel last financial year. So, crude imports are unlikely to exert much pressure | Illustration: Binay Sinha

Dharmakirti JoshiAdhish Verma

Listen to This Article

Last financial year, India’s current account deficit (CAD) printed at a non-worrisome 0.6 per cent of gross domestic product (GDP), driven by healthy net invisible receipts. It was a whit lower than 0.7 per cent in 2023-24, despite the goods trade deficit rising to 7.3 per cent of GDP from 6.7 per cent.
 
This happened because both the services trade and secondary income accounts saw a higher surplus, which more than offset the deterioration in the goods trade deficit. Such low reliance on external financing of CAD is a buffer against volatility in capital flows and the attendant currency swings
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper