The Objective of this term paper is to provide a concrete relationship between the Current account deficit and its Factors Affecting Indian economy. We have to carefully examine the various components of it and see its impact on the Indian economy. We’ll briefly discuss What is Current Account deficit and In order to support our proposition we will look at Empirical data and see if we find any correlation when in the situation of lower Current Account Deficit the economy Performs better and on the counter with the higher Current Account Deficit economy has to go through a situation a tough spell. We’ll try to look in the other developing Countries and see their trends with the Current account and try to connect the dots. We will also try and look through the phases in which developed countries has to go through and seeing is it a alarming situation for country like India which is still in its developing spell and yet to become a Developed country .Some of our studies we’ll include (1) Are Current Account Deficit are persistent in other economy as well and they don’t have any lasting impact on the economy. (2) Since Post-Reform did Indian Economy fared well since much of the regulation is detached. (3) As well as See if there is any Way that Government intervention helps in reducing Current Account Deficit.