New Delhi, Dec. 17 -- Driven by commodity price volatility amid the persistence of the US-India trade deal stalemate, the risk to current account (C/A) dynamics is likely to moderate, as one-off import shocks ease. According to a Union Bank of India report, with the India-US bilateral trade agreement nearing finalization, potentially by late December of this year, exports could gain by cutting tariffs from 50 per cent to 15-16 per cent. However, the near-term impact may be limited. The deal is expected to strengthen India's export base over time, partially offsetting pressures on the trade balance in the quarters ahead.

As India's external sector shows clear signs of improvement after a volatile start to the second half of the year, the ...