Overview
India posted a current account surplus of $7.1 billion for the January-March quarter of fiscal 2025/26, the central bank reported. That surplus amounted to 0.7% of gross domestic product for the quarter and reflected gains in the services sector alongside higher remittances from workers abroad.
The quarterly outcome marks a narrowing from the same quarter a year earlier, when the country recorded a larger surplus of $13.7 billion, equal to 1.4% of GDP. The data highlights a shift from the prior quarter in the same fiscal year: in the October-December period India ran a current account deficit of $13.2 billion, or 1.3% of GDP.
Full-year position and balance of payments
For the full fiscal year 2025-26, India’s current account registered a deficit of $25.2 billion, representing 0.6% of GDP. The broader balance of payments showed a surplus of $7.2 billion in the fourth quarter. However, when taken over the entire year, the balance of payments was in deficit by $23.6 billion.
Drivers cited
The central bank pointed to the services sector and elevated worker remittances as the primary contributors to the fourth-quarter current account surplus. Those inflows were sufficient to offset other components of the external account during the quarter, producing a positive net external balance for that period.
Context within the fiscal year
Although the fourth quarter returned to surplus, the annual figures show that the economy still ran a current account deficit for the fiscal year as a whole. The contrast between the quarterly surplus and the full-year deficit underscores the variability in India’s external balances across the fiscal year.
Key points
- Q4 (Jan-Mar) current account surplus: $7.1 billion, 0.7% of GDP.
- Full fiscal year 2025-26 current account deficit: $25.2 billion, 0.6% of GDP; balance of payments full-year deficit: $23.6 billion.
- Services sector performance and higher worker remittances were cited as the main supports for the quarterly surplus.
Risks and uncertainties
- Volatility between quarters - the country swung from a $13.2 billion current account deficit in October-December to a $7.1 billion surplus in January-March, indicating quarter-to-quarter variability in external balances.
- Despite the Q4 surplus, the full fiscal year outcome remains a current account deficit of $25.2 billion, leaving the annual external position in deficit.
- Although the Q4 balance of payments was in surplus, the full-year balance of payments ended in a $23.6 billion deficit, reflecting persistent annual imbalances.
These figures provide a snapshot of India’s external accounts for the latest fiscal year and the final quarter, highlighting the role of services receipts and remittances in the recent quarterly improvement while noting that the annual position remained in deficit.