Current account deficit stands at 0.5% of GDP in Q1FY27

Reserve Bank of India (RBI) stated India’s current account deficit stood at US$ 4.2 billion (0.5 per cent of GDP) in Q1:2026-27 as compared to US$ 3.4 billion (0.4 per cent of GDP) in Q1:2025-26. Merchandise trade deficit at US$ 86.1 billion in Q1:2026-27 was higher than US$ 68.9 billion in Q1:2025-26. Net services receipts increased to US$ 51.6 billion in Q1:2026-27 from US$ 47.9 billion a year ago.

Services exports have risen on a year-on-year basis in major categories such as computer services, other business services and transportation services. Net outgo on the primary income account, mainly reflecting payments of investment income, decreased to US$ 10.5 billion in Q1:2026-27 from US$ 13.3 billion in Q1:2025-26.

Personal transfer receipts under secondary income account, mainly representing remittances by Indians employed overseas, rose to US$ 42.9 billion in Q1:2026-27 from US$ 33.2 billion in Q1:2025-26. In the financial account, foreign direct investment (FDI) recorded a net inflow of US$ 6.1 billion in Q1:2026-27, higher than US$ 5.2 billion in Q1:2025-26.

Foreign portfolio investment (FPI) recorded a net outflow of US$ 9.6 billion in Q1:2026-27 as against a net inflow of US$ 1.6 billion in Q1:2025-26. Non-resident deposits (NRI deposits) recorded a net inflow of US$ 2.8 billion in Q1:2026-27 as compared to US$ 3.6 billion in Q1:2025-26.

Net inflows under external commercial borrowings (ECBs) to India amounted to US$ 3.3 billion in Q1:2026-27 as compared to US$ 4.4 billion in Q1:2025-26. Foreign exchange reserves depleted by US$ 8.1 billion (on a BoP basis) in Q1:2026-27 as against an accretion of US$ 4.5 billion in Q1:2025-26.

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