India's Trade Dynamics: A Closer Look at RBI's Latest Findings

According to the Reserve Bank of India’s latest economic outlook, India’s merchandise imports are projected to grow at more than double the pace of exports in the current financial year. This revelation comes from the Survey of Professional Forecasters on Macroeconomic Indicators (95th Round), released recently.

Projected Growth Rates and Economic Implications

The survey highlights that merchandise exports and imports are projected to grow by 1.2% and 2.5%, respectively, during 2025-26. Looking ahead to 2026-27, exports are expected to grow by 4.9%, while imports may climb by 6.0%. This widening trade gap could potentially strain India’s external balance, with the current account deficit (CAD) projected at 0.8% of GDP for 2025-26, slightly rising to 0.9% in 2026-27.

Economic Growth and Inflation Outlook

On the broader economic front, India’s real GDP is anticipated to grow by 6.4% in 2025-26, marginally below the RBI’s official forecast of 6.5%, with an expected rise to 6.7% in FY27. Inflation, as measured by the annual headline Consumer Price Index (CPI), is estimated at 3.1% for 2025-26, increasing to 4.4% in the following year.

Consumption and Investment Trends

The survey also sheds light on expenditure trends, with real private final consumption expenditure (PFCE) expected to rise by 6.5% in 2025-26 and 6.9% in 2026-27. Similarly, real gross fixed capital formation (GFCF) is projected to grow by 6.8% and 7.2% over the same period, indicating robust investment activity.