Current Account Deficit Narrows To 0.2% Of GDP In Q1 FY26
Merchandise trade deficit at $68.5 billion was higher than $63.8 billion in the year-ago period.
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.
Key Highlights
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.
