Gold imports drive India’s CAD to 1.3% in Q2 FY26: Analysts

India’s current account deficit (CAD) widened sequentially to USD 12.3 billion, or 1.3% of GDP, in the second quarter of FY26. Analysts believe that the deficit is led by a sharp rise in the merchandise trade gap despite strong growth in services exports and remittances.

- AGENCIES

The CAD had stood at 0.3% of GDP in the previous quarter. According to assessments by Crisil, ICICI Bank Research and Emkay Global, the merchandise deficit expanded as gold imports surged nearly 150% quarter-on-quarter, touching USD 19 billion in Q2, while goods exports declined on a sequential basis following the rollout of higher US tariffs on Indian shipments.

Overall goods exports stood at about USD 109 billion, while imports rose to nearly USD197 billion.