Reserve Bank of India (RBI) has stated that India’s current account balance recorded a deficit of US$ 2.4 billion (0.2 per cent of GDP) in Q1:2025-26 as compared with US$ 8.6 billion (0.9 per cent of GDP) in Q1:2024-25 and against a surplus of US$ 13.5 billion (1.3 per cent of GDP) in Q4:2024-25. Merchandise trade deficit at US$ 68.5 billion in Q1:2025-26 was higher than US$ 63.8 billion in Q1:2024-25.
Net services receipts increased to US$ 47.9 billion in Q1:2025-26 from US$ 39.7 billion a year ago. Services exports have risen on a y-o-y basis in major categories such as business services and computer services. Net outgo on the primary income account, primarily reflecting payments of investment income, increased to US$ 12.8 billion in Q1:2025-26 from US$ 10.9 billion in Q1:2024-25.
Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to US$ 33.2 billion in Q1:2025-26 from US$ 28.6 billion in Q1:2024-25. In the financial account, foreign direct investment (FDI) recorded a net inflow of US$ 5.7 billion in Q1:2025-26 as compared to a net inflow of US$ 6.2 billion a year ago. Foreign portfolio investment (FPI) recorded a net inflow of US$ 1.6 billion in Q1:2025-26 as compared to a net inflow of US$ 0.9 billion in Q1:2024-25.
Net inflows under external commercial borrowings (ECBs) to India amounted to US$ 3.7 billion in Q1:2025-26, as compared to US$ 1.6 billion in the corresponding period a year ago. Non-resident deposits (NRI deposits) recorded a lower net inflow of US$ 3.6 billion in Q1:2025-26 than US$ 4.0 billion in Q1:2024-25. There was an accretion of US$ 4.5 billion to the foreign exchange reserves (on a BoP basis) in Q1:2025-26 as compared to an accretion of US$ 5.2 billion in Q1:2024-25.