RBI Survey: India’s Merchandise Imports to Grow Twice as Fast as Exports in FY26

India’s trade balance could face renewed stress in FY26, as per the 95th round of RBI’s Survey of Professional Forecasters. According to the findings, merchandise imports are projected to grow by 2.5%, while exports are expected to rise only 1.2% during the same period. This mismatch suggests that India’s trade imbalance may widen, leading to a current account deficit (CAD) of 0.8% of GDP—up from previous years.

Key Forecasts: Imports Outpacing Exports

The RBI survey paints a concerning picture for trade dynamics,

• Merchandise exports (FY26): Expected to grow 1.2%
• Merchandise imports (FY26): Forecasted to grow 2.5%
• CAD (FY26): Estimated at 0.8% of GDP
• CAD (FY27): Expected to edge up to 0.9% of GDP

The imbalance continues into FY27, where exports may grow by 4.9%, but imports are projected to rise by 6.0%.

This trend could weaken India’s external sector resilience, especially as global demand remains uneven and geopolitical uncertainties persist.

What’s Driving Import Growth?

The increase in imports could be attributed to several factors,

• Rising demand for electronics, oil, gold, and capital goods
• Gradual recovery in domestic consumption, prompting increased input imports
• Potential currency depreciation, making imports pricier

Simultaneously, sluggish export growth could reflect slower global trade recovery, continued geopolitical tensions, and persistent inflationary pressures in key markets like the EU and the US.

Wider Economic Outlook

Despite trade concerns, the broader economic projections are fairly optimistic,

• Real GDP growth (FY26): Projected at 6.4%
• Real GDP growth (FY27): Expected to rise to 6.7%

Panelists assigned the highest probability to GDP growth in the 6.0–6.9% range for FY26 and 6.5–6.9% range for FY27. However, these figures remain slightly below RBI’s official forecast of 6.5% for FY26.

Consumption and Investment Trends

The survey also suggests healthy domestic demand, with,

• Private Final Consumption Expenditure (PFCE): Set to grow 6.5% in FY26 and 6.9% in FY27
• Gross Fixed Capital Formation (GFCF): Expected to rise 6.8% in FY26 and 7.2% in FY27
• These figures highlight a strong investment and consumption recovery, which could keep import demand elevated.