India's Current Account Deficit Narrows To $5.2 Billion In August, RBI Reports $45.4 Billion Balance Of Payments Surplus

Mumbai, Oct 15: India's current account deficit narrowed to USD 5.2 billion in August from USD 6.1 billion a year ago, aided by a lower merchandise trade deficit and higher surpluses in services trade, according to preliminary data released by the RBI on Thursday.

The net deficit in the merchandise trade account declined to USD 26.6 billion in August from USD 27.6 billion in the same month last year.

Merchandise exports rose to USD 44.7 billion in August from USD 35.1 billion a year ago, while imports increased to USD 71.3 billion from USD 62.7 billion, the RBI data showed.

Services trade surplus rises

The surplus in services trade increased to USD 16.5 billion in August from USD 15.6 billion a year ago. Services exports rose to USD 35.5 billion from USD 31.2 billion, while imports increased to USD 18.9 billion from USD 15.6 billion.

Net transfers, including remittances, increased to USD 12.8 billion in August from USD 12.2 billion a year ago, while the net deficit in the income account widened to USD 8 billion from USD 6.3 billion.

Current account deficit widens during April-August

During April-August 2026, the current account deficit widened to USD 18.3 billion from USD 12.8 billion in the corresponding period of the previous year, according to the preliminary data on 'Developments in India's Balance of Payments for the Month of August 2026'.

The merchandise trade deficit increased to USD 146 billion during the five months from USD 124.7 billion a year ago, while the surplus in services trade rose to USD 85.8 billion from USD 79.9 billion in the year-ago period.

Net transfers also increased to USD 66.8 billion from USD 55.6 billion.

Foreign investment inflows improve

On the capital account, net foreign direct investment (FDI) inflows stood at USD 3.3 billion in August, compared with a net outflow of USD 0.1 billion a year ago.

Also, net foreign portfolio investment recorded an inflow of USD 1.7 billion, against an outflow of USD 2.6 billion in August 2025.

Net banking capital recorded an inflow of USD 64.7 billion in August, compared with an outflow of USD 4.7 billion a year ago.

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Net non-resident Indian (NRI) deposits stood at USD 83 billion, against USD 1 billion in the same month last year.

Overall balance of payments turns positive

The overall balance of payments recorded a surplus of USD 45.4 billion in August, compared with a deficit of USD 5.6 billion a year ago.

During April-August 2026, the overall balance of payments recorded a surplus of USD 58 billion, compared with a deficit of USD 0.8 billion in the corresponding period last year.

(Except for the headline, this article has not been edited by FPJ's editorial team and is auto-generated from an agency feed.)

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