India current account deficit narrows to 0.2% of GDP in Q1; services exports drive enchancment: RBI

India’s current account deficit (CAD) eased to 0.2% of GDP, or $2.4 billion, in the April–June quarter of 2025-26, down from 0.9% of GDP ($8.6 billion) in the identical interval a yr earlier, the Reserve Bank of India mentioned on Monday. The enchancment was aided by greater services exports and stronger remittance inflows.In distinction, the previous January–March quarter had seen a surplus of $13.5 billion, or 1.3% of GDP, as per the stability of funds (BoP) knowledge. “India’s current account balance recorded a deficit of $2.4 billion (0.2% of GDP) in Q1:2025-26 as compared with $8.6 billion (0.9% of GDP) in Q1:2024-25 and against a surplus of $13.5 billion (1.3% of GDP) in Q4:2024-25,” the RBI mentioned.Merchandise commerce hole widened to $68.5 billion in Q1 from $63.8 billion a yr earlier, however services earnings rose to $47.9 billion towards $39.7 billion in the identical interval final yr, led by enterprise and laptop services. Personal switch receipts — largely remittances from Indians overseas — elevated to $33.2 billion from $28.6 billion.On the monetary account aspect, FDI inflows moderated to $5.7 billion in Q1, from $6.2 billion a yr in the past. Foreign portfolio funding (FPI) recorded a web influx of $1.6 billion versus $0.9 billion a yr earlier. External business borrowings (ECBs) introduced in $3.7 billion, greater than double the $1.6 billion seen in the identical quarter of 2024-25.NRI deposits slowed, with web inflows of $3.6 billion in Q1 towards $4 billion final yr. Meanwhile, outgo underneath the first earnings account, primarily funding earnings funds, rose to $12.8 billion from $10.9 billion.