India`s merchandise exports likely to come under pressure amid US-India trade, tariff uncertainty: Crisil
Crisil Ratings in its latest report has warned that India’s merchandise exports are likely to face strong headwinds due to uncertainty persists over India's trade negotiations with the United States (US) and concerns grow over further US tariffs on Russian crude oil purchases. It said in the near term, select agri-export segments, particularly tea and basmati rice, could face some pressure following the US decision to impose a 25% additional duty on any country doing business with Iran.
According to the report, India’s current account deficit (CAD) is expected to remain manageable, helped by a strong services trade surplus, steady remittance inflows and softer crude oil prices. It said the CAD is expected to be 1 per cent of gross domestic product (GDP) in the current financial year, with a mild uptick, but still within the safe zone, to 1.6 per cent in the financial year 2026-27.
The report further said with the merchandise exports growth rate lagging imports, the merchandise trade deficit widened to $25 billion in December of 2025 from $20.6 billion in the corresponding period of the previous year, marking the sharpest trade gap for the month on record. In terms of destinations, India's merchandise exports to the US declined 1.85 per cent to $6.88 billion in December 2025 as compared to $7.01 billion in the corresponding period of the previous year, impacted by high tariffs imposed by the US. Exports to the rest of the world rose at a slower rate. However, the US remained India's top export destination, largely driven by smartphone shipments from India.
