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Q4 current account surplus stands at 0.7% of GDP

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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Elon Musk flags India’s falling birth rate concerns

India’s fertility rate has fallen below the replacement level of 2.1 children per woman, drawing attention from billionaire entrepreneur Elon Musk. Reacting to a social media post highlighting the trend, Musk said the decline was particularly notable among educated populations.

According to recent data, India’s fertility rate has dropped to around 1.9, signalling a slowdown in population growth. These falling birth rates are linked to factors such as urbanisation, higher education levels, delayed marriages and greater workforce participation by women.

While lower fertility can ease pressure on resources, demographers warn that sustained declines could eventually lead to an ageing population and labour shortages, challenges already being faced by several developed nations.

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India plans to bring E85 fuel to cut oil imports

India has introduced E85 fuel, a new blend containing 85% ethanol and 15% petrol, as part of its efforts to reduce crude oil imports and promote cleaner transport. The fuel will be priced around ₹20 per litre cheaper than regular petrol.

The move is part of the government’s broader ethanol blending programme aimed at improving energy security and reducing dependence on fossil fuels. Officials say greater use of ethanol can help lower India’s fuel import bill while supporting farmers and the domestic biofuel industry.

E85 can only be used in flex-fuel vehicles, which are designed to run on higher ethanol blends. Several automobile manufacturers are preparing to launch flex-fuel models in India as the government pushes for alternative fuel options.

The government believes E85 will help reduce vehicle emissions because ethanol is a renewable fuel produced from agricultural feedstock such as sugarcane. Higher ethanol use is expected to lower the transport sector’s carbon footprint compared to conventional petrol.

India has made significant progress in ethanol blending in recent years and has achieved key targets ahead of schedule. The launch of E85 is seen as the next step in expanding the country’s biofuel ecosystem.

The introduction of E85 aligns with India’s wider strategy to diversify energy sources through biofuels, electric vehicles and other cleaner alternatives. The government hopes the new fuel will contribute to lower emissions, reduced fuel costs and greater energy independence in the years ahead.

Experts say the success of E85 will depend on the availability of flex-fuel vehicles and the expansion of fuel distribution infrastructure. Consumer awareness and access to refuelling stations will also play an important role in driving adoption.

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South Korea tops India as World’s sixth-largest stock market

South Korea has overtaken India to become the world’s sixth-largest stock market by market capitalisation, driven by a strong rally in technology and semiconductor stocks.

Statistical reports show the combined value of companies listed in South Korea has crossed $5 trillion, ahead of India’s market capitalisation of about $4.8 trillion. The shift has pushed India to seventh place in global stock market rankings.

The rise has largely been powered by the global artificial intelligence boom. South Korean chipmakers such as Samsung Electronics and SK Hynix have attracted strong investor interest as demand for AI-related chips and data-centre infrastructure continues to grow.

Indian markets, meanwhile, have faced pressure from weaker corporate earnings, foreign investor outflows and a weaker rupee. The absence of major AI-focused companies in benchmark indices has also limited gains compared with technology-heavy markets.

The latest development comes shortly after Taiwan moved ahead of India in global market rankings, causing India to slip from fifth to seventh position within a relatively short period.

The rankings underline the growing impact of AI-driven investments on global markets, with countries that have strong semiconductor industries benefiting the most from the ongoing technology boom.

Despite the decline, analysts remain positive about India’s long-term outlook. They point to strong economic growth, rising domestic participation in equities and continued infrastructure investment as key strengths supporting future market expansion.

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India considers $1 bn EV incentive plan

India is exploring a proposal worth more than $1 billion to encourage private companies to switch to electric buses and trucks, in a major push to speed up clean transport adoption in the country.

The idea under discussion is to offer financial support to fleet operators so they can replace diesel-powered commercial vehicles with electric ones. This would include buses used for passenger transport as well as heavy trucks used for freight movement.

Officials are reportedly working on how best to structure the incentives so that companies find it easier to bear the high upfront cost of electric vehicles. The aim is to make the shift more practical for private operators, not just government-run transport systems.

The move comes at a time when global oil prices remain volatile due to geopolitical tensions, adding pressure on India’s import bill since the country depends heavily on imported crude. Reducing fuel consumption in the transport sector is seen as one of the most effective ways to lower long-term energy costs.

Commercial transport is a major source of fuel usage and emissions, especially in cities and logistics corridors. By targeting this segment, the government hopes to reduce pollution levels while also improving energy security.

India has already been supporting electric mobility through various schemes that cover electric buses, two-wheelers, and charging infrastructure. However, the new proposal is expected to focus more directly on private operators, which could significantly expand the scale of adoption.

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India seals oil and defence deals in UAE

India and the United Arab Emirates signed multiple agreements on fuel supply, defence cooperation and investment during Prime Minister Narendra Modi’s visit to Abu Dhabi.

A key agreement was signed on supplies of Liquified Petroleum Gas (LPG) to support India’s growing fuel demand. The two countries also signed an MoU on Strategic Petroleum Reserves to improve India’s emergency crude oil storage capacity and energy security.

India and the UAE further signed an Agreement on Framework for the Strategic Defence Partnership, aimed at strengthening bilateral strategic and security cooperation. The agreement includes collaboration in maritime security, military coordination and defence partnerships.

Another important MoU was signed for setting up a Ship Repair Cluster at Vadinar in Gujarat. Officials said the project would help improve maritime infrastructure and support shipping and logistics activities.

The UAE also announced investments worth around $5 billion in Indian infrastructure projects as well as investments in RBL Bank and Samman Capital. The investments are expected to boost infrastructure development and financial sector growth in India.

Officials said the agreements were signed at a time when global energy markets remain volatile due to tensions in West Asia. Analysts believe the deals could help India secure long-term fuel supplies and strengthen strategic ties with one of its key Gulf partners.

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Iran conflict may slow India’s growth to 6.7%

India’s economic growth could slow to 6.7 percent in the current financial year due to rising global oil prices, weak consumer demand and uncertainty caused by the Iran conflict, according to a report by BMI, a Fitch Solutions company.

The report said escalating tensions in West Asia and higher crude oil prices are creating fresh challenges for the Indian economy. Since India imports a large portion of its crude oil requirements, any sharp increase in oil prices directly impacts inflation, import costs and government spending.

BMI warned that the recent surge in crude oil prices could increase fuel and transportation costs across sectors, putting pressure on businesses as well as household spending. Higher inflation may also reduce consumer demand, affecting overall economic activity.

The report noted that India’s growth had received support in recent years from tax cuts, strong government spending and infrastructure projects. However, that support is now beginning to fade, while global economic uncertainty continues to rise.

Economists said higher oil prices could also widen India’s current account deficit and put pressure on the rupee. Rising import bills may affect fiscal stability if crude prices remain elevated for a long period.

Despite the expected slowdown, India is still projected to remain one of the world’s fastest-growing major economies. Analysts believe government infrastructure spending, manufacturing growth and strong domestic demand could continue supporting the economy in the medium term.

The report comes at a time when global markets are closely watching developments in West Asia, particularly tensions involving Iran and disruptions in oil supply chains. Financial markets have already turned volatile due to fears of prolonged geopolitical instability.

BMI said India’s growth outlook will largely depend on global crude oil trends, inflation control measures and the government’s ability to maintain economic momentum amid external challenges.

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PM Modi urges pause in gold buying

Prime Minister Narendra Modi’s call urging Indians to avoid buying gold for a year has brought attention to the economic impact of the country’s massive dependence on gold imports. The appeal comes amid record-high gold prices and growing concerns over India’s widening trade deficit.

India remains one of the world’s largest gold consumers, importing the majority of its demand from overseas markets. Economists say rising gold imports increase pressure on foreign exchange reserves and weaken the rupee, especially at a time when crude oil prices are also climbing sharply.

The government’s concern is linked to the current account deficit, which expands when import bills rise faster than exports. Analysts note that high gold purchases during weddings and festive seasons significantly contribute to the import burden. With global gold prices continuing to rally due to geopolitical tensions and inflation concerns, India’s import costs have increased substantially.

Industry experts believe the Prime Minister’s statement is aimed at encouraging households to shift savings towards financial instruments instead of physical gold. Financial planners argue that excessive household allocation to gold limits productive capital flow into equities, mutual funds and banking products.

The jewellery industry, however, expects demand to remain resilient despite higher prices. Companies such as Titan and Senco Gold have indicated that wedding-related buying continues to support sales, although consumers are increasingly opting for lightweight jewellery and exchange schemes to manage costs.

Market observers say the government is trying to reduce non-essential imports at a time when the rupee is under pressure against the US dollar. A sustained rise in gold and crude oil imports could further strain India’s macroeconomic indicators in the coming months.

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₹30,000 cr blow to state-run oil firms in India

Indian oil marketing companies are facing heavy financial pressure as rising global crude prices continue to increase losses. Reports estimate that state-run firms are losing around ₹30,000 crore every month while keeping petrol and diesel prices unchanged.

The surge in crude prices has been linked to ongoing tensions in the Middle East, raising concerns over possible supply disruptions in the global energy market. Despite higher import costs, oil companies have not increased retail fuel prices in India.

Companies including Indian Oil, Bharat Petroleum and Hindustan Petroleum are reportedly bearing the burden to maintain price stability for consumers. Industry experts say this has resulted in major under-recoveries for the firms.

India depends heavily on imported crude oil, and any sharp rise in international prices directly impacts fuel companies and the economy. Economists say stable fuel prices help control inflation and reduce pressure on transport and daily expenses.

However, analysts warn that continued losses may become difficult to sustain if global oil prices remain elevated for a longer period.

The government has not yet announced any relief measures, but discussions are reportedly underway as companies continue to face mounting pressure.

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India hits record $863 bn export growth in FY26

India recorded its highest-ever annual exports in the financial year 2025-26, with total exports touching a record $863 billion. The strong performance came despite global economic uncertainty, geopolitical tensions, and slower growth in international trade.

The biggest support came from the services sector, which continued to perform strongly throughout the year. Exports of services such as IT, software, consulting, business support, and digital solutions grew by nearly 8.7%, helping India offset weakness in some merchandise categories.

Officials said the growth reflects the increasing global demand for Indian talent and technology-based services. Indian companies continued to provide digital and business solutions to clients worldwide, even as many economies faced inflation pressures and slowing consumer demand.

Merchandise exports, including engineering goods, electronics, pharmaceuticals, and chemicals, also remained stable. While some sectors faced pressure due to weak global demand and supply-chain disruptions, India managed to maintain overall export momentum.

The final export figures were revised upward after updated services trade data became available. Earlier estimates had projected slightly lower numbers, but the revised data confirmed a new export record for the country.

The achievement is also seen as a positive sign for India’s broader economic growth. Strong exports help bring foreign exchange into the country, support employment, and improve business activity across sectors.

The government has also been working to strengthen trade relationships with multiple countries and push new trade agreements to increase market access for Indian businesses.

Over the past few years, India’s technology and digital industries have expanded rapidly, making the country a key global provider of IT and business services. Industry experts believe these efforts could further boost exports in the coming years.

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