RBI Data Shows India Records Current Account Surplus Of 0.7% Of GDP In Q4 FY26

New Delhi, Jun 9 (KNN) India recorded a current account surplus of USD 7.1 billion, or 0.7 percent of GDP, in the fourth quarter (January-March) of FY26, according to preliminary Balance of Payments (BoP) data released by the Reserve Bank of India (RBI).
 
Current Account Surplus Narrows Amid Wider Trade Deficit
 
The surplus was lower than the USD 13.7 billion surplus, or 1.4 percent of GDP, recorded in the corresponding quarter of FY25, primarily due to a wider merchandise trade deficit.
 
India's merchandise trade deficit widened to USD 83.4 billion during Q4 FY26 from USD 59.3 billion a year earlier. However, strong growth in services exports and remittance inflows helped offset part of the deficit.
 
Services Exports And Remittances Provide Support
 
Net services receipts rose to USD 60.4 billion during the quarter from USD 53.3 billion in Q4 FY25, supported by higher exports of computer services and other business services.
 
Personal transfer receipts, mainly remittances from Indians working overseas, increased significantly to USD 43.5 billion from USD 33.9 billion in the year-ago period.
 
The net outgo under the primary income account, which largely reflects investment income payments, declined to USD 11.1 billion from USD 11.9 billion in the corresponding quarter last year.
 
FDI Inflows Strengthen While FPI Outflows Persist
 
On the capital account side, foreign direct investment (FDI) recorded net inflows of USD 4.2 billion during Q4 FY26, compared with USD 0.4 billion a year earlier.
 
Foreign portfolio investment (FPI), however, witnessed a net outflow of USD 12 billion during the quarter, higher than the USD 5.9 billion outflow recorded in Q4 FY25.
 
Net inflows under non-resident Indian (NRI) deposits increased to USD 3.3 billion from USD 2.8 billion, while net inflows through external commercial borrowings (ECBs) moderated to USD 3.6 billion from USD 7.5 billion in the corresponding period.
 
India's foreign exchange reserves increased by USD 7.2 billion on a BoP basis during the quarter, compared with an accretion of USD 8.8 billion in Q4 FY25.
 
FY26 Current Account Deficit Remains Contained
 
For the full financial year 2025-26, India's current account deficit (CAD) stood at USD 25.2 billion, equivalent to 0.6 percent of GDP, marginally higher than USD 22.9 billion recorded in FY25.
 
Net invisible receipts rose to USD 312 billion during FY26 from USD 264 billion in the previous year, driven by stronger services exports and higher remittance inflows.
 
Capital Flows Show Mixed Trends In FY26
 
Net FDI inflows increased sharply to USD 6.9 billion during FY26 from USD 1 billion in FY25. In contrast, FPIs recorded net outflows of USD 16.4 billion compared with net inflows of USD 3.6 billion a year earlier.
 
The RBI data also showed that India's foreign exchange reserves declined by USD 23.6 billion on a BoP basis during FY26, compared with a depletion of USD 5 billion in FY25.
 
(KNN Bureau)