New Delhi: Commerce and Industry Minister Piyush Goyal on Thursday said the government is monitoring the present situation and several steps are under consideration to contain the widening current account deficit (CAD).
India’s CAD rose to USD 13.2 billion, or 1.3 per cent of GDP, in the December quarter from USD 11.3 billion in the year-ago period, mainly due to a wider trade gap caused by a decline in exports to the US, according to RBI data released on March 2.
However, the CAD moderated to USD 30.1 billion (1 per cent of GDP) in April-December 2025 from USD 36.6 billion (1.3 per cent of GDP) in the same period a year ago.
A CAD occurs when the value of goods and services imported and other payments exceeds the value of export of goods and services and other receipts by a country in a particular period.
“We are monitoring the situation. All the various arms of the government are working as a team. Several steps are under consideration. The situation globally is quite challenging but we have the confidence and courage of conviction that we will come out winners even in this challenging time,” Goyal told reporters here.
He was replying to a question that with the rupee sliding, what more measures the government can take to contain the widening CAD.
Increasing imports of gold and silver are contributing to widening trade deficit and CAD. Gold imports rose 24 per cent to hit an all-time high of USD 71.98 billion in 2025-26. In volume terms, however, the imports dipped 4.76 per cent to 721.03 tonnes.
In April, imports surged 81.69 per cent year-on-year to USD 5.62 billion driven by high prices.
Similarly, silver imports jumped about 150 per cent to USD 12 billion in the last fiscal. In volume terms also, it rose by 42 per cent to 7,334.96 tonnes in 2025-26.
The rise in imports of these precious metals in April has pushed the country’s trade deficit (difference between imports and exports) to a three-month high of USD 28.38 billion.
Prices of the yellow metal are hovering around Rs 1,56,000 per 10 grams (inclusive of all taxes) in the national capital. Silver was priced at around Rs 2.53 lakh per Kg.
The Indian rupee’s sharp decline has emerged as one of the biggest economic warning signs for policymakers, investors and businesses. Once considered among Asia’s more stable currencies, the rupee has now become one of the worst-performing emerging market currencies this year, pressured by a toxic mix of expensive oil, capital outflows, widening trade deficits and a surging US dollar.
It has depreciated about 7 per cent so far in 2026 and is down roughly 6.1 per cent since the outbreak of the Iran conflict in late February.
India imports more than 88 per cent of its crude oil requirements. That means every rise in global oil prices directly increases demand for dollars because Indian refiners must buy more dollars to pay for imported crude.
As oil prices surged following the Iran conflict and disruptions in the Strait of Hormuz, pressure on the rupee intensified. When crude prices rise, India’s import bill expands, demand for dollars increases, and the trade deficit widens. That creates sustained downward pressure on the rupee.
FPI outflows due to rising geopolitical tensions and elevated US interest rates are also putting pressure on the domestic currency.
Falling domestic currency puts pressure on government coffers as interest payment of foreign loans goes up while overseas borrowing by financial institutions becomes costlier.
Prime Minister Narendra Modi has urged people to avoid buying gold and foreign travel, reduce petrol and diesel consumption to strengthen the country’ economy amidst the West Asia crisis.
“We have made an appeal to all the citizens of India to be more conscious about their spending on products which are import-dependent. And I think it’s just very natural that every Indian who trusts Prime Minister Modi has taken cognizance of that and is helping the country in every small or big way with their own actions,” Goyal said.
On India-GCC (Gulf Cooperation Council) free trade agreement talks, he said the first round of talks will happen in the second half of 2026.
