India Records Current Account Surplus Of $13.5 Billion In March Quarter, RBI Data Shows

India’s current account balance recorded a surplus of $13.5 billion, or 1.3% of the gross domestic product, in the March 2025 quarter, as compared with $4.6 billion (0.5% of GDP) in the year-ago period, according to the data released by the Reserve Bank of India on Friday.

The surplus logged during the quarter under review comes after a deficit of $11.3 billion, or 1.1% of GDP, in the third quarter of FY25.

Merchandise trade deficit at $59.5 billion in the January-March period of FY25 was higher than $52 billion in the year-ago quarter. However, it moderated from $79.3 billion in Q3FY25.

The net services receipts increased to $ 53.3 billion in Q4FY25 from $ 42.7 billion a year ago.

• Services exports have risen on a year-on-year basis in major categories such as business services and computer services.

• Net outgo on the primary income account, primarily reflecting payments of investment income, moderated to $11.9 billion in Q4FY25 from $14.8 billion in Q4FY24.

• Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to $33.9 billion in Q4FY25 from $31.3 billion in Q4FY24.

• Foreign direct investment recorded a net inflow of $0.4 billion in Q4FY25 as compared to an inflow of $2.3 billion in the corresponding period of Q4FY24.

• Foreign portfolio investment recorded a net outflow of $5.9 billion in Q4FY25 as against a net inflow of $11.4 billion in Q4FY24.

• Net inflows under external commercial borrowings to India amounted to $7.4 billion in Q4FY25, as compared to $2.6 billion in the corresponding period a year ago.

• India’s current account deficit at $23.3 billion (0.6% of GDP) during 2024-25 was lower than $26.0 billion (0.7% of GDP) during 2023-24, primarily due to higher net invisibles receipts.

"While the current account balance expectedly reported a seasonal surplus in Q4FY25, the size of the same overshot expectations, amid a surprise dip in primary income outflows in the quarter," said Aditi Nayar, chief economist at ICRA. This led to the unexpected narrowing in the CAD to 0.6% of GDP in FY25 from 0.7% in FY2024, she added.

“Amid expectations of a widening in the merchandise trade deficit as well as a moderation in the services trade surplus in Q1FY26 vis-à-vis Q4FY25, we expect the current account to revert to a deficit in the ongoing quarter, printing at ~1.3% of GDP,” Nayar further said.