New Delhi, Sept. 3 -- India's current account deficit (CAD) is expected to almost double in the current financial year, FY26, to 1.2 per cent of gross domestic product (GDP), compared with 0.6 per cent in FY25, amid rising trade and geopolitical tensions, according to a report by Union Bank of India.

The report pointed out that India's merchandise trade deficit widened sharply in July 2025 to USD 27.35 billion, compared with USD 18.7 billion in June.

This sharp increase signals that the current account deficit may widen further in the second quarter of FY26.

It stated, "CAD may almost double to 1.2 per cent of GDP amid trade & geopolitical tensions."

A key factor weighing on the outlook is the recent tariff hike. From August 27, tarif...