India recorded a current account surplus of $13.5 billion in the January-March 2025 quarter, equivalent to 1.3% of GDP, the Reserve Bank of India reported. This marks a significant improvement from the $4.6 billion surplus (0.5% of GDP) in the same quarter of the previous year and a sharp reversal from the $11.3 billion deficit seen in Q3 FY2025.<\/p>\n\n\n\n
For the full fiscal year 2024-25, the current account deficit narrowed to $23.3 billion, or 0.6% of GDP, compared to $26 billion (0.7% of GDP) in FY2023-24. The decline was largely driven by higher net invisibles receipts, especially from the services sector.<\/p>\n\n\n\n
The merchandise trade deficit for Q4 FY2025 stood at $59.5 billion, up from $52 billion in the same quarter a year earlier. However, it showed improvement from the $79.3 billion recorded in Q3 FY2025. Net services receipts jumped to $53.3 billion from $42.7 billion in Q4 FY2024, fueled by strong growth in business and computer services exports.<\/p>\n\n\n\n
Aditi Nayar, Chief Economist at ICRA, noted that the larger-than-expected Q4 surplus was driven by a surprise dip in primary income outflows. “This led to the unexpected narrowing in the CAD to 0.6% of GDP in FY2025 from 0.7% in FY2024,” she said.<\/p>\n\n\n\n
On the capital side, foreign direct investment (FDI) recorded a modest net inflow of $0.4 billion in Q4, compared to $2.3 billion a year earlier. For the full year, net FDI dropped sharply to $1 billion from $10.2 billion in FY2024.<\/p>\n\n\n\n
Foreign portfolio investments (FPI) registered a net outflow of $5.9 billion in Q4 FY2025, reversing from an $11.4 billion inflow a year ago. Annual FPI inflows also declined significantly to $3.6 billion from $44.1 billion.<\/p>\n\n\n\n
External commercial borrowings (ECBs) showed strength with $7.4 billion in net inflows, up from $2.6 billion in the same quarter last year. Meanwhile, NRI deposits fell to $2.8 billion in Q4 FY2025, from $5.4 billion a year ago.<\/p>\n\n\n\n
India\u2019s foreign exchange reserves rose by $8.8 billion in Q4 FY2025 on a balance of payments basis, a smaller accretion than the $30.8 billion increase recorded in Q4 FY2024.<\/p>\n\n\n\n
Looking ahead, ICRA expects the current account deficit to average around 1% of GDP in FY2026, assuming crude oil prices hover around $70 per barrel. \u201cThis is eminently manageable despite global uncertainties,\u201d Nayar said.<\/p>\n\n\n\n
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Full-year deficit narrows to 0.6% of GDP amid strong services India recorded a current account surplus of $13.5 billion in the January-March 2025 quarter, equivalent to 1.3% of GDP, the Reserve Bank of India reported. This marks a significant improvement from the $4.6 billion surplus (0.5% of GDP) in the same quarter of the previous<\/p>\n","protected":false},"author":5,"featured_media":6723,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[4240,4237,4239,4242,4241,4238,3969,4243,3852],"class_list":{"0":"post-6722","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-world","8":"tag-aditi-nayar","9":"tag-current-account-surplus","10":"tag-foreign-investment","11":"tag-icra","12":"tag-india-gdp","13":"tag-q4-fy2025","14":"tag-rbi","15":"tag-services-exports","16":"tag-trade-deficit"},"_links":{"self":[{"href":"https:\/\/guardianglobe.org\/index.php?rest_route=\/wp\/v2\/posts\/6722"}],"collection":[{"href":"https:\/\/guardianglobe.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/guardianglobe.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/guardianglobe.org\/index.php?rest_route=\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/guardianglobe.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=6722"}],"version-history":[{"count":1,"href":"https:\/\/guardianglobe.org\/index.php?rest_route=\/wp\/v2\/posts\/6722\/revisions"}],"predecessor-version":[{"id":6724,"href":"https:\/\/guardianglobe.org\/index.php?rest_route=\/wp\/v2\/posts\/6722\/revisions\/6724"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/guardianglobe.org\/index.php?rest_route=\/wp\/v2\/media\/6723"}],"wp:attachment":[{"href":"https:\/\/guardianglobe.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=6722"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/guardianglobe.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=6722"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/guardianglobe.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=6722"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}