CAD Widens To USD 13.2 Bn In Oct-Dec FY26 From USD 11.3 Bn YoY: RBI

New Delhi, Mar 3 (KNN) India’s current account deficit (CAD) widened to USD 13.2 billion (1.3 per cent of GDP) in the third quarter (October–December) of 2025–26 from USD 11.3 billion (1.1 per cent of GDP) a year ago, according to preliminary data released by the Reserve Bank of India (RBI).

Trade Gap Expands, Services Cushion Impact

The merchandise trade deficit increased to USD 93.6 billion in Q3 FY26 from USD 79.3 billion a year earlier. Net services receipts, however, rose to USD 57.5 billion from USD 51.2 billion, led by growth in computer and other business services exports.

Net outgo on the primary income account moderated to USD 12.2 billion from USD 16.4 billion in the year-ago quarter. Personal transfer receipts, largely remittances by Indians working overseas, rose to USD 36.9 billion from USD 35.1 billion.

Capital Flows Show Mixed Trends

In the financial account, foreign direct investment (FDI) recorded a net outflow of USD 3.7 billion during the quarter, higher than the USD 2.8 billion outflow a year earlier.

Foreign portfolio investment (FPI) saw a marginal net outflow of USD 0.2 billion, significantly lower than the USD 11.4 billion outflow in Q3 FY25.

Non-resident Indian (NRI) deposits registered a net inflow of USD 5.1 billion, while inflows under external commercial borrowings (ECBs) eased to USD 3.3 billion from USD 4.4 billion.

Foreign exchange reserves declined by USD 24.4 billion on a balance of payments (BoP) basis during the quarter, compared with a depletion of USD 37.7 billion a year earlier.

April–December FY26: CAD Narrows 

For April–December 2025, the CAD moderated to USD 30.1 billion (1.0 per cent of GDP), down from USD 36.6 billion (1.3 per cent of GDP) in the corresponding period of 2024-25.

Net invisible receipts increased to USD 221.5 billion from USD 191.0 billion, supported by higher services exports and remittances.

Net FDI inflows rose to USD 3.0 billion during the nine-month period, compared with USD 0.6 billion a year earlier. In contrast, FPI recorded net outflows of USD 4.3 billion, against net inflows of USD 9.4 billion in the previous year.

On a BoP basis, foreign exchange reserves declined by USD 30.8 billion during April–December FY26, compared with a depletion of USD 13.8 billion a year earlier.

(KNN Bureau)