Indian Rupee: AI imports add pressure against US Dollar – Standard Chartered

Standard Chartered economists Anubhuti Sahay and Saurav Anand highlight that India’s AI-enabling goods trade deficit has become the second-largest contributor to the country’s trade gap after Oil, overtaking Gold. They argue the deterioration is mainly price-driven and expect the AI-linked deficit to rise further, adding pressure on the current account and INR, partly offset by recent NRI deposit-led capital inflows.

AI imports strain India’s external accounts

"The AI-enabling goods trade deficit is now the second-largest contributor to India’s trade deficit after oil, having surpassed the gold deficit."

"The 12-month rolling trade deficit in AI-enabling products – advanced semiconductors, processors, memory chips, data-processing units (DPUs) and networking hardware – rose to 2.0% of GDP (USD 77bn) in July 2026 from 1.5% a year earlier."

"The recent deterioration in India’s AI-enabling goods trade deficit appears increasingly price-led rather than volume-led, in our view."

"If the current trend is sustained, we expect India’s AI-enabling goods trade deficit to widen further to c.2.3% of GDP by end-March 2027, adding pressure on the C/A deficit and the INR."

"The recent surge in capital inflows, supported by policy incentives to attract non-resident deposits, is likely to anchor India’s external balance and the INR in the near term."