India’s current account deficit moderated to $ 12.3 billion (1.3% of GDP) in Q2 FY26 from $20.8 billion (2.2% of GDP) in Q2 FY25. Merchandise trade deficit at $ 87.4 billion in Q2 FY26 was lower than $88.5 billion in the same period last year, as per preliminary data on India’s balance of payments (BoP) for the second quarter (Q2), [July-September 2025-26] released by the Reserve Bank of India (RBI) on Monday.
Net services receipts increased to $50.9 billion in Q2 FY26 from $44.5 billion a year ago. Services exports have risen on a year-on-year basis in major categories such as computer services and other business services.
Net outgo on the primary income account, mainly reflecting payments of investment income, increased to $12.2 billion in Q2 FY26 from $ 9.2 billion in the year-ago period.
Personal transfer receipts under secondary income account, mainly representing remittances by Indians employed overseas, rose to $38.2 billion from $34.4 billion a year ago.
In the financial account, foreign direct investment (FDI) recorded a net inflow of $ 2.9 billion in Q2 FY26 as against a net outflow of $ 2.8 billion in the corresponding period of the previous year. Foreign portfolio investment (FPI) recorded a net outflow of $ 5.7 billion in Q2FY26 as against a net inflow of $ 19.9 billion a year ago.
Net inflows under external commercial borrowings (ECBs) to India amounted to $ 1.6 billion in Q2FY26 as compared with net inflows of $5 billion in the year-ago period.
Non-resident deposits (NRI deposits) recorded a net inflow of $2.5 billion in Q2 FY26 as compared with $6.2 billion a year ago, as per data.
There was a depletion of $10.9 billion to the foreign exchange reserves (on a BoP basis) in Q2 FY26 as against an accretion of $18.6 billion in the year-ago period.
During April-September 2025 (H1:FY26), India’s current account deficit declined to $15 billion (0.8%of GDP) from $25.3 billion (1.3% of GDP) in H1 FY25.
Net invisibles receipts at $141.3 billion were higher in H1 FY26 than that of $123 billion a year ago, primarily on account of net services receipts and net personal transfers.
Net FDI inflows increased to $ 7.7 billion in H1 FY26 from $3.4 billion in H1 FY25, according to data released by the RBI.
FPI recorded net outflows of $4.1 billion in H1 FY26 as against net inflows of $ 20.8 billion a year ago. In H1 FY26, there was a depletion of $ 6.4 billion to the foreign exchange reserves (on a BoP basis) as against an accretion of $ 23.8 billion in the corresponding period a year ago.
Published – December 01, 2025 11:48 pm IST
