India Current Account Surplus Rises to 4-Year High

India’s current account deficit narrowed to USD 12.3 billion, or 1.3% of GDP, in the July–September 2025-26 quarter, down from a revised USD 20.8 billion, or 2.2% of GDP, in the same period last fiscal year. The goods deficit eased slightly to USD 87.4 billion from USD 88.5 billion a year ago, while surpluses in services (USD 50.9 billion from USD 44.5 billion) and secondary income (USD 36.5 billion from USD 32.4 billion) increased. The primary income deficit, however, rose to USD 12.2 billion from USD 9.2 billion. For the first half of 2025-26, the current account deficit fell to USD 15.0 billion from USD 25.3 billion, supported mainly by stronger services and secondary income surpluses.

India posted a current account deficit of $2.5 billion in the first quarter of the 2026 financial year, narrowing from the $6.6 billion gap in the corresponding quarter of the previous year to mark the softest deficit in the period since 2021. The development was owed to an increase in the surplus of services ($47.9 billion vs $39.7 billion in FY26Q1) and the secondary income account ($31.0 billion vs $26.3 billion). These were enough to offset a wider goods deficit ($-68.5 billion vs $-63.8 billion) amid higher imports of general goods, in addition to a wider deficit in the primary income account ($-12.8 billion vs $-10.9 billion).

India posted a current account surplus of $13.5 billion in the final three months of the 2025 fiscal year, the widest since the September quarter of 2020, and contrasting with market expectations of a soft surplus of $8 billion. The data reflected an increase in the services surplus ($53.3 billion vs $42.7 billion in March quarter 2024) amid strong exports in major categories such as business services and computer services, and a wider secondary surplus ($31.5 billion vs $28.7 billion). In the meantime, the primary deficit narrowed ($-11.9 billion vs $-14.8 billion). These offset a wider goods deficit ($59.8 billion vs $52 billion).