India's CAD Shrinks Amidst Rising Service Exports
India's current account deficit (CAD) reduced significantly in the June quarter to USD 2.4 billion, bolstered by a surge in service exports. The Reserve Bank of India reports a notable improvement when compared to last year, with foreign investments continuing to show a positive trend.
- Country:
- India
The Reserve Bank of India (RBI) reported a noticeable decrease in India's current account deficit (CAD) during the June quarter, which now stands at USD 2.4 billion, or 0.2% of the GDP. This improvement from last year's USD 8.6 billion is largely attributed to the rise in service exports.
In 2024-25, India's current account deficit was USD 23.3 billion, a reduction from the USD 26 billion recorded in 2023-24. The Q1:2025-26 deficit shows marked improvement from Q1:2024-25 and is a shift from the surplus experienced in Q4:2024-25.
While the merchandise trade deficit increased to USD 68.5 billion from last year's USD 63.8 billion, net services receipts reached USD 47.9 billion, driven by an upswing in business and computer services exports. The financial account saw foreign direct investment (FDI) net inflow at USD 5.7 billion and foreign portfolio investment (FPI) at USD 1.6 billion for the quarter.
(With inputs from agencies.)
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