India's current account deficit (CAD) increased to $13.2 billion, representing 1.3% of GDP, in the December quarter compared to $11.3 billion in the year-ago period, according to RBI data released on March 2. As reported by The Times of India, the widening was primarily attributed to a wider trade gap caused by a decline in exports to the US. However, the CAD showed improvement on a cumulative basis, moderating to $30.1 billion (1% of GDP) in April-December 2025 from $36.6 billion (1.3% of GDP) in the same period a year ago. Recent developments show that increasing imports of gold and silver are contributing to the widening trade deficit and CAD, with gold imports rising 24% to hit an all-time high of $71.98 billion in 2025-26. In volume terms, gold imports actually dipped 4.76% to 721.03 tonnes.
Commerce and Industry Minister Piyush Goyal stated that the government is monitoring the present situation and several steps are under consideration to contain the widening of current account deficit. According to The Times of India, Goyal emphasized that 'all the various arms of the government are working as a team' and that 'several steps are under consideration' to address the challenging global environment. He expressed confidence that India will emerge as a winner despite the current challenging global conditions, stating 'we have the confidence and courage of conviction that we will come out winners even in this challenging time'. When asked whether the government was considering steps to curb non-essential imports, Goyal said there were currently no such plans, but encouraged citizens to reduce spending on import-dependent products. 'No such plans of that sort right now, but we have of course made an appeal to all the citizens of India to be more conscious about their spending on products which are import dependent,' he said, adding that 'every Indian who trusts Prime Minister Modi has taken cognisance of that and is helping the country in every smaller big way with their own actions'.
Goyal provided updates on the ongoing US-India trade negotiations, stating that 'the Trump administration and India continue to have positive and productive discussions towards a finalised trade deal'. As reported by The Times of India, a senior US official confirmed that 'the two sides were close to wrapping up an agreement, with most substantive issues already resolved'. The minister confirmed that 'the first round of talks will happen in the second half of 2026 as scheduled'. Goyal highlighted continued US investment commitments, particularly in the technology sector, noting 'US commitment upwards $60 billion in last six months looking at Amazon, Google data centre investment pledge' and emphasizing that 'US-India truly working as natural partners, complement each other'. Recent developments show that Indian delegates have been arriving in Washington for the latest round of negotiations.
The current account deficit 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. As reported by The Times of India, Goyal's statements indicate the government's proactive approach to managing external sector challenges while maintaining confidence in India's economic resilience. The minister acknowledged that 'the situation globally is quite challenging' while expressing optimism about India's long-term prospects. The latest data reveals that the challenging global environment is contributing to the CAD widening, with Goyal's comments coming in response to questions about the rupee sliding and what additional measures the government could take to contain CAD widening, highlighting the government's commitment to addressing external sector pressures.
