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Informist, Friday, Jun. 27, 2025
NEW DELHI - India's current account was in a surplus of $13.48 billion in the quarter ended March, the Reserve Bank of India data released Friday showed. The current account was in a deficit of $11.32 billion in Oct-Dec, and a surplus of $4.59 billion in Jan-Mar 2024.
In percentage terms, the current account surplus was 1.3% of GDP, higher than 0.5% of GDP a year ago. In Oct-Dec, the current account deficit was 1.1% of GDP.
The current account deficit was $23.26 billion, or 0.6% of GDP, during 2024-25 (Apr-Mar). This was lower than $26.03 billion, or 0.7% of GDP in FY24.
"While the current account balance expectedly reported a seasonal surplus in Q4 FY2025, the size of the same overshot our expectations, amid a surprise dip in primary income outflows in the quarter," ICRA Chief Economist Aditi Nayar said in a note. "Amid expectations of a widening in the merchandise trade deficit as well as a moderation in the services trade surplus in Q1 FY2026 vis-a-vis Q4 FY2025, we expect the current account to revert to a deficit in the ongoing quarter, printing at around 1.3% of GDP," Nayar said.
Merchandise trade deficit rose to $59.5 billion in Jan-Mar from $52.0 billion a year ago. The trade deficit was $79.3 billion in Oct-Dec. Net services receipts increased to $53.3 billion in the March quarter from $42.7 billion a year ago.
Net outgo on the primary income account, which reflects payments of investment income, moderated to $11.9 billion in Jan-Mar from $14.8 billion a year ago. Workers' remittances, a key contributor to India's foreign exchange earnings, rose to $33.9 billion in Jan-Mar, from $31.3 billion a year ago.
Jan-Mar saw accretion of $8.8 billion to the foreign exchange reserves on Balance of Payments basis, compared with an accretion of $30.8 billion a year ago, the RBI said. In FY25, there was a depletion of $5.0 billion in the foreign exchange reserves on a balance of payments basis.
Foreign portfolio investment recorded a net outflow of $5.9 billion in Jan-Mar as against a net inflow of $11.4 billion a year ago. For FY25, FPI recorded a net inflow of $3.6 billion, lower than $44.1 billion a year ago.
Foreign direct investment recorded a net inflow of $0.4 billion in the March quarter, compared with an inflow of $2.3 billion a year ago. Net inflow under FDI was $1.0 billion during FY25, lower than $10.2 billion during FY24.
ICRA sees India's current account deficit averaging 1% of GDP in FY26, "assuming an average crude oil price of around $70/barrel for the fiscal, which is eminently manageable in spite of the prevailing global uncertainties." End
US$1 = INR 85.48
Reported by Shubham Rana
Edited by Akul Nishant Akhoury
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