India current account deficit narrows to 0.2% of GDP in Q1; services exports drive improvement: RBI – The Times of India

India’s current account deficit (CAD) narrowed sharply to $2.4 billion, or 0.2% of GDP, in the June quarter of 2025-26, from $8.6 billion (0.9% of GDP) in the same period last year, the Reserve Bank of India (RBI) said on Monday.The improvement was aided by robust services exports, even as the merchandise trade gap widened. For the full year 2024-25, CAD stood at $23.3 billion (0.6% of GDP), lower than $26 billion (0.7% of GDP) in 2023-24, RBI data showed as reported PTI.“India’s current account balance recorded a deficit of $2.4 billion (0.2% of GDP) in Q1:2025-26 as compared with $8.6 billion (0.9% of GDP) in Q1:2024-25 and against a surplus of $13.5 billion (1.3% of GDP) in Q4:2024-25,” the central bank said in its statement.During the April–June quarter, the merchandise trade deficit widened to $68.5 billion from $63.8 billion a year earlier. However, net services receipts climbed to $47.9 billion from $39.7 billion, buoyed by higher exports in categories such as business services and computer services.On the financial account, foreign direct investment (FDI) saw a net inflow of $5.7 billion, marginally lower than the $6.2 billion recorded a year ago. Foreign portfolio investment (FPI), however, rose to a net inflow of $1.6 billion in Q1:2025-26, compared with $0.9 billion in the year-ago period, RBI added.