Current Account Deficit Narrows To 0.2% Of GDP In Q1 FY26

India recorded a current account deficit of $2.4 billion or 0.2% of the gross domestic product in the first quarter of the current financial year on account of higher merchandise trade deficit.

This was compared with $8.6 billion or 0.9% of the GDP in Q 1FY25 and against a surplus of $ 13.5 billion or 1.3% of the GDP in Q4 FY25, according to data published by the Reserve Bank of India on Monday.

• Merchandise trade deficit at $68.5 billion was higher than $63.8 billion in the year-ago period.

• Net services receipts increased to $47.9 billion from $39.7 billion a year ago. Services exports have risen 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 $12.8 billion from $10.9 billion in Q1 FY25.

• Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to $33.2 billion from $28.6 billion in Q1 FY25.

• In the financial account, FDI recorded a net inflow of $5.7 billion as compared to a net inflow of $6.2 billion a year ago.

• FPI recorded a net inflow of $1.6 billion in Q1 FY26 as compared to a net inflow of $ 0.9 billion in Q1 FY25.

• Net inflows under external commercial borrowings to India amounted to $3.7 billion in Q1 FY26, as compared to $1.6 billion in the corresponding period a year ago.

• Non-resident deposits (NRI deposits) recorded a lower net inflow of $3.6 billion in Q1FY26 as compared to $ 4 billion in Q1 FY25.

• There was an accretion of $4.5 billion to the foreign exchange reserves on a BoP basis in Q1 FY26 as compared to an accretion of $5.2 billion in Q1 FY25.