India’s Current Account Deficit (CAD)eased to 0.2 % of FY25-26, sharply lower than 0.9% of GDP ($8.6 billion)in the same period a year ago, according to data released by the Reserved bank of India (RBI) on Monday.
The improvement was supported by higher services exports and stronger remittance inflows, even as the merchandise trade deficit widened . In contrast, the January- March 2025 quarter had recorded a surplus of $ 13.5 billion ( 1.3% of GDP)
Trade and services performance
● The merchandise trade Deficit expanded to $ 68.5 billion , up from $63.8 billion last year .
●Services exports rose sharply to $47.9 billion ,compared with $39.7 billion in Q1 2024-25 led by business and computer services .
●Remittances increased to $33.2 billion against $28.6 billion in the year ago quarter.
Financial Account Highlights
● FDI inflows moderated to $5.7 billion (from $6.2 billion last year)
●FPI inflows rose to $1.6 billion (from $0.9 billion).
●External commercial borrowings (ECBs) more than doubled to $3.7 billion ( from $1.6 billion)
● NRI deposits slipped to $3.6 billion ( from $billion)
Meanwhile investment income outflow under the primary income account rose to $12.8 billion, comared with $10.9 billion a year earlier.
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