India recorded a current account surplus of $7.1 billion, or 0.7% of GDP, in the January-March quarter of FY26, supported by strong growth in services exports and remittance inflows, according to data released by the Reserve Bank of India on Monday.
The surplus was lower than the $13.7 billion, or 1.4% of GDP, recorded in the corresponding quarter of the previous year.
The country's merchandise trade deficit widened to $83.4 billion during the quarter, compared with $59.3 billion a year earlier, reflecting higher import outgo. However, this was partly offset by a rise in net services receipts to $60.4 billion from $53.3 billion in the year-ago period, driven by growth in computer services and other business services exports.
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As per the central bank data, remittance inflows remained a key pillar of external stability, with personal transfer receipts, largely including money sent home by Indians working overseas, rising to $43.5 billion in the March quarter from $33.9 billion a year ago. Meanwhile, net outgo under the primary income account declined to $11.1 billion from $11.9 billion, providing additional support to the current account balance.
Capital flows in Q4 FY26
According to RBI data, net foreign direct investment (FDI) inflows stood at $4.2 billion during the quarter, higher than $0.4 billion in the year-ago period.
Foreign portfolio investors (FPIs) recorded a net outflow of $12 billion in the March quarter, compared with a net outflow of $5.9 billion a year earlier.
Non-resident Indian (NRI) deposits registered net inflows of $3.3 billion, up from $2.8 billion in the corresponding quarter of FY25. Net inflows through external commercial borrowings (ECBs) amounted to $3.6 billion, compared with $7.5 billion a year ago.
Foreign exchange reserves increased by $7.2 billion on a balance of payments basis during the quarter, compared with an accretion of $8.8 billion in the year-ago period.
FY26 balance of payments
For the financial year 2025-26, India’s current account deficit stood at $25.2 billion, equivalent to 0.6% of GDP, compared with a deficit of $22.9 billion, or 0.6% of GDP, in FY25.
The merchandise trade deficit widened to $337.3 billion in FY26 from $286.9 billion a year earlier. Net services receipts rose to $216.6 billion from $188.8 billion, while secondary income receipts increased to $143.6 billion from $123.5 billion.
Net invisibles receipts stood at $312 billion in FY26, higher than $264 billion in the previous year, primarily on account of net services receipts and net personal transfers.
Capital flows in FY26
Net FDI inflows increased to $6.9 billion in FY26 from $1 billion in FY25. FPIs recorded net outflows of $16.4 billion during FY26, compared with net inflows of $3.6 billion in the previous year.
Foreign exchange reserves declined by $23.6 billion on a balance of payments basis in FY26, compared with a depletion of $5 billion in FY25.
