New Delhi, March 5 -- India's external sector outlook remains broadly manageable but faces rising risks from geopolitical developments in West Asia that could push up crude oil prices and widen the current account deficit (CAD), according to a recent research note by Yes Bank.

The report noted that India recorded a Balance of Payments (BoP) deficit of USD 24.4 billion in Q3 FY26, wider than the USD 10.9 billion deficit in the previous quarter, largely due to capital account outflows.

Despite the deterioration in BoP, the current account deficit narrowed marginally to USD 13.2 billion (1.3% of GDP) from USD 14.1 billion in Q2, supported by strong services exports and remittance inflows, which offset a widening merchandise trade gap drive...