Managing Current Account, Rupee Stability Key Macro Priorities For 2026–27: CEA

Chief Economic Adviser V Anantha Nageswaran today said managing India’s current account, credibly financing it and preventing further currency depreciation would be the central macroeconomic priorities for 2026–27 amid rising geopolitical fragmentation and growing stress in global trade and energy markets.

“Managing the current account, credibly financing it and preventing further currency depreciation are the central macroeconomic imperatives of 2026–27,” Nageswaran said while speaking at a Confederation of Indian Industry event.

The CEA said India’s fiscal consolidation path, infrastructure investment push and reform measures undertaken in recent years provided a strong macroeconomic foundation, but argued that the changing global environment required a broader strategic rethink.

“The strategic context demands more than sound macro management. It demands a rethinking of how we position ourselves in a structurally altered world,” he said.

Nageswaran said the global economic order that emerged after the Second World War and accelerated after the 1990s was coming under simultaneous pressure from trade wars, strategic decoupling, technology bifurcation and the repricing of geopolitical risk.

“What we are experiencing is not a crisis within the system, it is a structural challenge to the organising principles of the system itself,” he said.

According to him, geoeconomic fragmentation was increasingly replacing comparative advantage as the organising principle of global commerce, with supply chains now being rebuilt for resilience rather than efficiency.

He also pointed to deepening divisions in semiconductor supply chains, digital infrastructure and technological standards, saying emerging economies were finding it increasingly difficult to remain neutral between competing technology ecosystems.

Nageswaran warned that the ongoing West Asia crisis had become a direct economic risk for India because of the country’s dependence on imported crude oil, LPG and remittance flows from the Gulf region.

He said crude futures had risen sharply since the start of the conflict, while freight rates and fertiliser prices had also surged, creating risks for inflation, the current account deficit and the exchange rate.

“For India, the exposure is structural. 87% of our crude is imported,” he said, adding that nearly half of these imports transit through or near the Strait of Hormuz.

The CEA also said developed economies often calibrated access to markets, technology and capital in ways that protected their own strategic interests, arguing that India needed greater clarity and self-reliance while navigating a fragmented global order.

“The assumption that our rise will be enthusiastically facilitated by those whose current advantages it would eventually challenge requires scrutiny,” he said.

Nageswaran said India’s recent trade agreements with countries and blocs including the United Kingdom, European Union, EFTA nations, Australia and others reflected efforts to diversify economic relationships and reduce dependence on any single geography.

He said the current global transition also created an opportunity for India to play a larger role in shaping future international economic arrangements, provided the country acted with “seriousness and speed”.