Export outlook seen uncertain in FY26

India’s trade outlook for the current financial year remains uncertain due to the looming threat of reciprocal tariffs by the United States, according to a report by the Union Bank of India. The report expected India’s current account deficit (CAD) to widen to 1.2% of GDP in FY26, up from an estimated 0.9% in FY25. The bank highlighted that even though there is a 90-day pause on the proposed US tariffs, the threat still exists and continues to weigh on the outlook for Indian exports. The merchandise trade deficit widened significantly to USD 26.42 billion in April 2025, compared to USD 21.54 billion in March 2025. This was much higher than the estimate of around USD 20 billion and also exceeded the USD 19.19 billion recorded in April 2024, as per a report.

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