India recorded a current account surplus of $7.1 billion, or 0.7% of GDP, in the fourth quarter of FY26, reflecting the strength of the country’s services exports and remittance inflows despite a wider merchandise trade deficit.
According to data released by the Reserve Bank of India (RBI), the surplus marked an improvement in India’s external sector performance during the January-March quarter. The positive balance was primarily driven by robust earnings from services exports and steady inflows of money sent home by Indians working abroad.
Services exports, particularly in information technology, business services, consulting and financial services, continued to remain a key contributor to foreign exchange earnings. India’s globally competitive services sector helped cushion the impact of a growing trade gap in goods.
Remittances also remained a major source of support. Inflows from overseas Indians contributed significantly to the current account balance, highlighting the continued importance of the Indian diaspora to the country’s external finances.
The merchandise trade deficit widened during the quarter as imports outpaced exports. Higher imports of crude oil, electronics, machinery and other goods contributed to the increase. However, the strong performance of the services sector and remittances more than compensated for the trade imbalance.
Economists said the surplus demonstrates the resilience of India’s external sector despite global economic uncertainties. The country’s diversified sources of foreign exchange earnings have helped maintain stability even as international trade conditions remain challenging.
A current account surplus occurs when the value of exports of goods and services, along with income and transfer receipts, exceeds the value of imports and outgoing payments. Such a surplus generally supports the domestic currency and strengthens foreign exchange reserves.
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