India's CAD Declines To 1.3% Of GDP In July-September Quarter

India's CAD Declines To 1.3% Of GDP In July-September Quarter

The merchandise trade deficit, at USD 87.4 billion during the quarter, was lower than the corresponding figure of USD 88.5 billion in the same quarter of 2024-25.

New Delhi: India's current account deficit moderated to USD 12.3 billion or 1.3 per cent of GDP in the second quarter (July-September) of 2025-26 from USD 20.8 billion or 2.2 per cent of GDP in the same quarter of the previous financial year, according to RBI data released on Monday.

The merchandise trade deficit, at USD 87.4 billion during the quarter, was lower than the corresponding figure of USD 88.5 billion in the same quarter of 2024-25.

Net services receipts during Q2 of the current financial year increased to USD 50.9 billion from USD 44.5 billion a year ago.

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Services exports have risen on a year-on-year basis in major categories such as computer services and other business services, the RBI said.

Net outgo on the primary income account, mainly reflecting payments of investment income, increased to USD 2.2 billion in Q2:2025-26 from USD 9.2 billion in Q2:2024-25.

Personal transfer receipts under the secondary income account, mainly representing remittances by Indians employed overseas, rose to USD 38.2 billion during the quarter from USD 34.4 billion in the year-ago period.

Foreign direct investment (FDI) recorded a net inflow of USD 2.9 billion during the July-Sept quarter this year, as against a net outflow of USD 2.8 billion in the corresponding period of 2024-25, the RBI statement said.

Foreign portfolio investment (FPI) recorded a net outflow of USD 5.7 billion in Q2 of 2025-26 as against a net inflow of USD 9.9 billion in the same quarter of the previous financial year.

Net inflows under external commercial borrowings (ECBs) to India amounted to USD 1.6 billion in Q2:2025-26 as compared with net inflows of USD 5 billion in the corresponding period a year ago.

Non-resident deposits (NRI deposits) recorded a net inflow of USD 2.5 billion in the second quarter as compared with USD 6.2 billion a year ago.

There was a depletion of USD 10.9 billion to the foreign exchange reserves (on a BoP basis) in Q2 of 2025-26 as against an accretion of USD 18.6 billion in the same quarter of the previous financial year, the statement added.

Source: ZeeNews
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