New Delhi, Dec. 17 -- India's external sector outlook remains broadly stable despite recent volatility in trade data, with the current account deficit (CAD) expected to remain around 1 per cent of GDP in FY26, supported by easing commodity prices, resilient services exports and moderating trade pressures, according to a research report by Union Bank of India.

The report noted that oil prices are expected to remain modestly bearish in December 2025, weighed down by ample global supply, rising inventories and softening demand conditions. This trend is likely to provide meaningful support to India's trade and current account dynamics, given the economy's high sensitivity to crude prices.

"Going forward, we see trade deficit moderating afte...