India’s merchandise exports are likely to come under intensified pressure in the coming months amid unresolved trade issues with the United States and concerns over potential additional levies linked to India’s purchase of Russian crude oil, according to a latest report by ratings agency CRISIL.

The agency said the continuing impasse over the proposed US-India trade agreement has created uncertainty for exporters, particularly at a time when global trade conditions remain fragile. Adding to the challenge is the risk of punitive measures from the US over countries engaging in trade involving Iranian-linked routes and Russian energy supplies.

In the near term, CRISIL warned that select agri-exports such as tea and basmati rice could face pressure following the US decision to impose a 25 per cent tariff on countries trading with Iran. These categories, though niche, contribute significantly to India’s export basket and rural incomes.

Despite the merchandise export concerns, CRISIL said India’s current account deficit is expected to remain manageable. Strong growth in services exports, steady inward remittances and softer global crude oil prices are likely to provide a buffer. The current account deficit is projected at around one per cent of GDP in the current financial year, with a mild rise to 1.6 per cent in 2026-27, still within a comfortable range.

The merchandise trade deficit widened to USD 25 billion in December 2025, compared with USD 20 billion in the same month last year, as import growth continued to outpace exports.

Exports to the US slowed sharply to 1.8 per cent year-on-year in December, while shipments to other regions also grew at a slower pace. However, the US retained its position as India’s largest export destination, driven largely by rising smartphone exports.