New Delhi, April 20 -- India's record trade deficit of USD 333.2 billion in FY26 is likely to soften in the coming months due to multiple trade agreements signed during the year with various countries, according to a report by Bank of Baroda.

The report stated that the recent surge in oil prices is expected to correct gradually, and projected the current account deficit at 1.5 to 2 per cent of GDP in FY27, though it flagged downside risks if geopolitical challenges persist further.

Merchandise exports rose 0.9 per cent in FY26 to USD 441.7 billion against 0.2 per cent growth in FY25, while imports surged 7.5 per cent to USD 775 billion from USD 721 billion in the previous year. The services surplus rose to USD 213.9 billion from USD 188...