Israel-Iran conflict may widen India's current account deficit by 0.3% of GDP: ICRA

If the heightened tension in the West Asia pushes average crude prices by USD 10 per barrel, it will typically push up India's net oil imports by nearly USD 13-14 billion during the year, enlarging India's CAD by 0.3 per cent of GDP, noted a recent report by ICRA.

- TBG NETWORK

"If the average crude oil price rises to USD 80-90/bbl in FY2026, then the CAD is likely to widen to 1.5-1.6% of GDP from our current estimate of 1.2-1.3% of GDP. This would also exert pressure on the USD/INR pair during the fiscal," ICRA said.

The report says the conflict between Iran and Israel, which began on June 13, 2025, pushed crude prices from USD 64-65/bbl to USD 74-75/bbl. Now, after the US strike on Iran's nuclear sites, Iran has announced that it will close the Strait of Hormuz, which can disrupt the global crude supply.