India’s current account recorded a surplus of USD 13.5 billion (or 1.3 per cent of GDP) in the January-March quarter of 2024-25 as compared with USD 4.6 billion (or 0.5 per cent of GDP) in the same quarter of 2023-24, RBI data showed Friday.
Reportedly, the country’s current account posted a surplus for the first time in four quarters. In the October-December quarter of 2024-25, the current account was in a deficit of USD 11.3 billion (1.1 per cent of GDP). Merchandise trade deficit, at USD 59.5 billion in Q4 2024-25, was higher than USD 52.0 billion in Q4 2023-24. However, it moderated from USD 79.3 billion in Q3 2024-25.
Net services receipts increased to USD 53.3 billion in Q4 2024-25 from USD 42.7 billion a year ago. Services exports have risen on a year-on-year basis in major categories such as business services and computer services. Net outgo on the primary income account, primarily reflecting payments of investment income, moderated to USD 11.9 billion in Q4 2024-25 from USD 14.8 billion in Q4 2023-24.
Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to USD 33.9 billion in Q4 2024-25 from USD 31.3 billion in Q4 2023-24. In the financial account, foreign direct investment (FDI) recorded a net inflow of USD 0.4 billion in Q4 2024-25 as compared to an inflow of USD 2.3 billion in the corresponding period of 2023-24. Foreign portfolio investment (FPI) recorded a net outflow of USD 5.9 billion in Q4 2024-25 as against a net inflow of USD 11.4 billion in Q4 2023-24.
In the entire year 2024-25, India’s current account deficit, at USD 23.3 billion (0.6 per cent of GDP) was lower than USD 26.0 billion (0.7 per cent of GDP) during 2023- 24, primarily due to “higher net invisibles receipts.” Net invisibles receipts were higher during 2024-25 than a year ago on account of services and personal transfers, RBI said today.
Aditi Nayar, Chief Economist and Head – Research and Outreach, ICRA Limited, said, “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. This led to the unexpected narrowing in the CAD to 0.6 per cent of GDP in FY2025 from 0.7 per cent in FY2024.”
“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 1.3 per cent of GDP. We foresee India’s current account deficit to average 1 per cent of GDP in FY2026, assuming an average crude oil price of USD 70/barrel for the fiscal, which is eminently manageable in spite of the prevailing global uncertainties,” added Nayar.
In another news, the Reserve Bank of India, in consultation with the State Governments/Union Territories (UTs), announced today that the quantum of total market borrowings by the State Governments/UTs for the quarter July – September 2025, is pegged to be Rs 2.86 lakh crore.
