New Delhi: India’s current account deficit (CAD) is expected to widen from 0.6 per cent of GDP in FY2027 to 0.6 per cent in FY26, according to CRISIL’s ‘Trade First Cut’ report for July 2026, as higher crude oil and commodity prices increase pressure on the country’s external balance.“We expect the current account deficit (CAD) to widen to 1.5% of gross domestic product (GDP) in FY2027, compared to 0.6% in FY2026,” Crisil said in the report.The rating agency said rising oil prices will remain the biggest driver of the widening merchandise trade deficit. “Oil freight remains the main driver of the trade deficit. Higher year-on-year crude oil and commodity prices will weigh on the CAD,” it said.CRISIL expects crude oil prices to average $82-87 per barrel in the current financial year, compared to an average of $70.3 per barrel in the last financial year.At the same time, he cautioned that the outlook for crude oil prices remains uncertain due to geopolitical tensions in the Middle East. “In view of recent geopolitical tensions in West Asia, the sustainability of the interim agreement remains worth monitoring,” the report said.The forecast comes after official trade data released earlier this week showed India’s merchandise trade deficit widened to $30.4 billion in June from $28.2 billion in May and $19.1 billion in the year-ago period, as imports grew at a faster pace than exports.Merchandise imports rose 31 percent year-on-year to $70.8 billion in June, faster than the 20.6 percent increase in May. According to CRISIL, the growth was mainly driven by core imports, which exclude oil and gems and jewellery.Main imports led by electronic goods, machinery and chemicals increased by 31.4 percent, while crude oil imports increased by 40 percent year-on-year.Meanwhile, merchandise exports rose 15.5 percent year-on-year to $40.4 billion in June, lower than the 18 percent growth recorded in May. Petroleum exports nearly halved sequentially to $4.9 billion, reflecting a 20.3 percent month-on-month decline in average Brent crude prices.The services sector continued to support the external account, although its surplus declined. Preliminary estimates show that services exports rose 2.9 percent year-on-year in June, while imports rose 12.7 percent, resulting in a narrowing of the services trade surplus to $15.1 billion from $16.2 billion a year earlier.“Meanwhile, goods exports will continue to weather global trade disruptions, which will be partially offset by stronger services,” CRISIL said.