India’s current account deficit (CAD) faces upward pressure in FY25 amid rising global crude prices, with every $10 per barrel increase in oil potentially worsening the annual CAD by $15 billion, according to a report by Union Bank of India (UBI).The bank has retained its CAD forecast at 0.9% of GDP for FY25, but cautioned that commodity price trends, particularly in crude oil and metals, pose a marginal upside risk. CAD is projected to widen to 1.2% of GDP in FY26, the report said.“We see a marginal upward risk to our estimate for the current account (C/A) deficit for FY25 GDP. We continue to maintain our view of widening in C/A deficit in FY26 to 1.2% in GDP vis-a-vis an estimated 0.9% in FY25,” UBI said, quoted ANI.Over the past month, Brent crude has traded between $64 and $76 per barrel, and has risen 14% in the last 15 days amid intensifying geopolitical tensions. The report flagged this trend as a key factor that could significantly impact India’s trade deficit and external sector health.UBI noted that while global commodity prices remain a key risk, weak global demand and sluggish export growth may soften the blow to the overall trade balance. However, it warned that any further escalation in Middle East tensions could strain India’s import bill, given the CAD’s high sensitivity to oil prices.On the positive side, India’s invisible surplus — led by services exports — remains robust. The country posted a services trade surplus of $188.75 billion in FY25, which helped offset a $122.45 billion oil trade deficit, the report noted.UBI also pointed out that geopolitical developments, including tariff actions and any new trade agreements with the US or Europe, will influence India’s external sector outlook in the coming quarters.