India’s trade momentum remains firm despite global volatility, and the current account is expected to slip into a modest deficit before returning to positive territory later in the fiscal, SBI Research said in a report on Saturday.

According to the report, the current account deficit (CAD) is projected to be about 1.8 per cent and 2.8 per cent of GDP in Q2 and Q3 of FY26, respectively, before turning positive in Q4 FY26. The full-year CAD is estimated to remain in the range of 1–1.3 per cent of GDP, with the overall balance of payments likely to show a marginal deficit of up to USD 10 billion during the fiscal.

“Even though the balance of payments (BOP) will turn negative in FY26, the alarm bells being sounded regarding its impact on rupee movements appear a little overblown at this poin

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