India posts $7.1 billion current account surplus in Q4 as services exports strengthen

India recorded a current account surplus of $7.1 billion (0.7% of GDP) in the January-March quarter of FY26 supported by higher services exports and a rise in remittances from overseas Indians, according to Reserve Bank of India data released on Monday.The surplus stood at $13.7 billion, or 1.4% of GDP, in the corresponding quarter of FY25, as reported PTI.However, for the full financial year 2025-26, the current account deficit widened to $25.2 billion, or 0.6% of GDP, from $22.9 billion, or 0.6% of GDP, in FY25.According to the RBI’s report on Developments in India’s Balance of Payments during the Fourth Quarter (January-March) of 2025-26, the merchandise trade deficit widened to $83.4 billion in the March quarter from $59.3 billion a year earlier.Despite the higher trade gap, net services receipts rose to $60.4 billion from $53.3 billion in the year-ago period.Services exports recorded year-on-year growth in major segments, including computer services and other business services, the RBI said.Personal transfer receipts under the secondary income account, mainly reflecting remittances by Indians working overseas, increased to $43.5 billion in Q4 FY26 from $33.9 billion a year earlier.On the financial account side, foreign direct investment (FDI) posted a net inflow of $4.2 billion during the quarter, compared with $0.4 billion in the corresponding period last year.Foreign portfolio investors (FPIs) recorded net inflows of $12 billion in the January-March quarter against net outflows of $5.9 billion a year ago, according to the RBI data.The central bank also said net outgo under the primary income account, which largely reflects investment income payments, declined to $11.1 billion in Q4 FY26 from $11.9 billion in the year-ago period.Non-resident Indian (NRI) deposits registered net inflows of $3.3 billion during the quarter, higher than $2.8 billion in the corresponding period of FY25.“Foreign exchange reserves increased by USD 7.2 billion (on a BoP basis) in Q4 2025-26 as compared to an accretion of USD 8.8 billion in Q4 2024-25,” the RBI said.For the full year FY26, net invisible receipts rose to $312 billion from $264 billion in FY25, driven primarily by higher net services receipts and personal transfers.Net invisible receipts comprise services, primary income and secondary income accounts.The data also showed that net FDI inflows stood at $6.9 billion during FY26.However, FPIs recorded net outflows of $16.4 billion during the fiscal year compared with net inflows of $3.6 billion in FY25.India’s foreign exchange reserves declined by $23.6 billion on a balance of payments basis during FY26, compared with a depletion of $5 billion in the previous year, the RBI data showed.