Current account deficit moderates to $12.3 bn in Q2: RBI data
In the April-June 2025 period, the current account balance recorded a deficit of $2.4 billion, or 0.2 per cent of GDP. The current account deficit is the difference between exports and imports of goods and services.
The merchandise trade deficit at $87.4 billion in Q2 FY26 was lower than $88.5 billion in the same quarter of the previous year, the data showed.
The country’s current account deficit moderated to $12.3 billion, or 1.3 per cent of the gross domestic product (GDP) in July-September 2025 from $20.8 billion, or 2.2 per cent of GDP, in the year-ago period, the Reserve Bank of India (RBI) data showed.
In the April-June 2025 period, the current account balance recorded a deficit of $2.4 billion, or 0.2 per cent of GDP. The current account deficit is the difference between exports and imports of goods and services. It is a key indicator of the country’s external sector.
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The merchandise trade deficit at $87.4 billion in Q2 FY26 was lower than $88.5 billion in the same quarter of the previous year, the data showed.
Personal transfer receipts under secondary income accounts, mainly representing remittances by Indians employed overseas, rose to $38.2 billion in Q2 FY26 from $34.4 billion in the corresponding quarter of the last year.
Net services receipts increased to $50.9 billion in Q2 FY26 from $44.5 billion a year ago. Services exports rose on a year-on-year basis in major categories such as computer services and other business services.
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In the financial account, foreign direct investment (FDI) recorded a net inflow of $2.9 billion as against a net outflow of $2.8 billion in the corresponding period of 2024-25. Foreign portfolio investment (FPI) recorded a net outflow of $5.7 billion as against a net inflow of $19.9 billion in the year-ago quarter.
The country’s foreign exchange reserves depleted by $10.9 billion on a balance of payments (BoP) basis in Q2 FY26 as against an accretion of $18.6 billion in in the year-ago period.
According to ICRA Ltd Chief Economist Aditi Nayar, the spike in gold imports in October 2025 is likely to bloat the ongoing quarter’s (Q3 FY26) current account deficit considerably to above 2.5 per cent of GDP.
“With gold imports unlikely to sustain this surge in the coming months, we expect the monthly merchandise trade deficit figures to ease relative to the levels seen in October 2025. Overall, we foresee India’s current account deficit at a relatively manageable around 1.1-1.2 per cent of GDP in FY2026,” she said.
The merchandise trade deficit at $87.4 billion in Q2 FY26 was lower than $88.5 billion in the same quarter of the previous year, the data showed. 
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