AI could be India’s secret weapon against CAD and US tariffs

India’s economy faces a double bind today. On one side, the current account deficit (CAD) is widening, touching $23.3 billion in late 2023, driven by a relentless import bill crude oil, electronics, gold, and fertilisers being the usual culprits. On the other side, US tariffs on Indian goods add an external squeeze, limiting export competitiveness in sectors like steel, textiles, and certain chemicals. Put together, this creates a structural pressure: Our import-heavy economy struggles to balance its books.

India has a unique advantage few economies possess. While goods trade runs a persistent deficit, services trade gives India a massive cushion.