India's trade deficit expected to rise in fiscal 2026

India's merchandise trade deficit is expected to increase in fiscal year 2026 due to strong domestic consumption driving up imports. Exports may decline amid a slowing global economy and potential US tariffs, according to Crisil. The service sector is projected to provide some support, as India maintains a surplus in this area. However, risks from US tariffs remain a concern, given India's higher import taxes on US goods. Despite these challenges, Crisil forecasts India's GDP growth will remain steady at 6.5% in fiscal 2026, depending on stable monsoon conditions and commodity prices.