India’s current account deficit moderated to $12.3 billion or 1.3 per cent of GDP in the second quarter (July-September) of 2025-26 from $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 $87.4 billion during the quarter, was lower than the corresponding figure of $88.5 billion in the same quarter of 2024-25. Net services receipts during Q2 of the current financial year increased to $50.9 billion from $44.5 billion a year ago.

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 $ 2.2 billion in Q2:2025-26 from $9.2 billion in Q2:2024-25.

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

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

Foreign portfolio investment (FPI) recorded a net outflow of $5.7 billion in Q2 of 2025-26 as against a net inflow of $9.9 billion in the same quarter of the previous financial year.Net inflows under external commercial borrowings (ECBs) to India amounted to $1.6 billion in Q2:2025-26 as compared with net inflows of $5 billion in the corresponding period a year ago.

Non-resident deposits (NRI deposits) recorded a net inflow of $2.5 billion in the second quarter as compared with $6.2 billion a year ago. There was a depletion of $10.9 billion to the foreign exchange reserves (on a BoP basis) in Q2 of 2025-26 as against an accretion of $18.6 billion in the same quarter of the previous financial year, the statement added.