Mumbai: India’s current account deficit (CAD) narrowed to 0.2 per cent of GDP, or $2.4 billion, during the April-June period of 2025-26 compared to 0.9 per cent of the GDP, or $8.6 billion, in the year-ago period, helped by services exports, the RBI said on Monday.
In the preceding January-March quarter, the current account was in a surplus of $13.5 billion (1.3 per cent of GDP).
“India’s current account balance recorded a deficit of $2.4 billion (0.2 per cent of GDP) in Q1:2025-26 as compared with $8.6 billion (0.9 per cent of GDP) in Q1:2024-25 and against a surplus of $13.5 billion (1.3 per cent of GDP) in Q4:2024-25,” according to India’s balance of payments (BoP) data.
Current account reflects a country’s overseas earnings and expenditures.
Merchandise trade deficit at $68.5 billion in the first quarter (Q1) of 2025-26 was higher than $63.8 billion in Q1, 2024-25.
However, net services receipts increased to $47.9 billion in Q1, 2025-26 from $39.7 billion a year ago.
Services exports have risen on a year-on-year basis in major categories such as business services and computer services.
Similarly, personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to $33.2 billion in Q1, 2025-26 from $28.6 billion in Q1, 2024-25.
In the financial account, foreign direct investment (FDI) recorded a net inflow of $5.7 billion in Q1, 2025-26 as compared to a net inflow of $6.2 billion a year ago, according to the BoP.
Further, foreign portfolio investment (FPI) recorded a net inflow of $1.6 billion in Q1, 2025-26 as compared to a net inflow of $0.9 billion in Q1, 2024-25.
The RBI said net inflows under external commercial borrowings (ECBs) to India amounted to $3.7 billion in Q1, 2025-26, as compared to $1.6 billion in the corresponding period a year ago.
NRI deposits recorded a lower net inflow of $3.6 billion during the quarter under review as against $4 billion in Q1, 2024-25, it said.
The net outgo on the primary income account, primarily reflecting payments of investment income, increased to $12.8 billion in April-June quarter of fiscal 2025-26 from $10.9 billion in April-June quarter of 2024-25, financial year according to the data.