India Records Current Account Surplus Amid Fiscal Shifts

In a significant financial development, India reported a current account surplus of USD 13.5 billion, equivalent to 1.3% of its GDP, for the January-March quarter of the 2024-25 fiscal year, according to figures released by the Reserve Bank of India (RBI). This marks a considerable increase from the USD 4.6 billion surplus, or 0.5% of GDP, recorded during the same period the previous year.

Despite the overall annual current account deficit standing at USD 23.3 billion, a reduction from USD 26 billion the prior year, the improvement is attributed to increased net invisibles receipts. However, the merchandise trade deficit has also seen a rise, reaching USD 59.5 billion in Q4:2024-25 compared to USD 52 billion in Q4:2023-24.

Interestingly, net services receipts showed a steep increase, climbing to USD 53.3 billion in Q4:2024-25 from USD 42.7 billion the previous year, driven by robust growth in major export categories such as business and computer services.

(With inputs from agencies.)