CAD Likely to Widen in Q4, Other Quarters Too: Experts

This is likely to put pressure on rupee and inflate costs for businesses

- Rhik Kundu

NEW DELHI: India's current account deficit (CAD) is set to widen in the fourth quarter of FY25, experts warned, citing factors such as looming Trump tariffs which would not only hit Indian exports but also drive Chinese shipments to India, and falling short-term foreign capital outflows.

Lower remittances from overseas Indians — the fallout from a shrinking global economy and US President Donald Trump's proposed tax on such transfers — could also help widen the deficit, they said ahead of the June-end publication of Q4 data.

The widening could continue into subsequent quarters unless there's a change in macroeconomic fundamentals, they warned. Increased tariffs, announced by US President Donald Trump, could spur China to divert goods to other countries, experts fear.