Developments in India’s Balance of Payments during the First Quarter (April-June) of 2025-26

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Developments in India’s Balance of Payments during the First Quarter (April-June) of 2025-26

Preliminary data on India’s balance of payments (BoP) for the first quarter (Q1), i.e., April-June 2025-26, are presented in Statements I and II.

Key Features of India’s BoP in Q1:2025-26

India’s current account balance recorded a deficit of US$ 2.4 billion (0.2 per cent of GDP) in Q1:2025-26 as compared with US$ 8.6 billion (0.9 per cent of GDP) in Q1:2024-25 and against a surplus of US$ 13.5 billion (1.3 per cent of GDP) in Q4:2024-25.¹
Merchandise trade deficit at US$ 68.5 billion in Q1:2025-26 was higher than US$ 63.8 billion in Q1:2024-25.
Net services receipts increased to US$ 47.9 billion in Q1:2025-26 from US$ 39.7 billion a year ago. Services exports have risen on a y-o-y basis in major categories such as business services and computer services.
Net outgo on the primary income account, primarily reflecting payments of investment income, increased to US$ 12.8 billion in Q1:2025-26 from US$ 10.9 billion in Q1:2024-25.
Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to US$ 33.2 billion in Q1:2025-26 from US$ 28.6 billion in Q1:2024-25.
In the financial account, foreign direct investment (FDI) recorded a net inflow of US$ 5.7 billion in Q1:2025-26 as compared to a net inflow of US$ 6.2 billion a year ago.
Foreign portfolio investment (FPI) recorded a net inflow of US$ 1.6 billion in Q1:2025-26 as compared to a net inflow of US$ 0.9 billion in Q1:2024-25.
Net inflows under external commercial borrowings (ECBs) to India amounted to US$ 3.7 billion in Q1:2025-26, as compared to US$ 1.6 billion in the corresponding period a year ago.
Non-resident deposits (NRI deposits) recorded a lower net inflow of US$ 3.6 billion in Q1:2025-26 than US$ 4.0 billion in Q1:2024-25.
There was an accretion of US$ 4.5 billion to the foreign exchange reserves (on a BoP basis) in Q1:2025-26 as compared to an accretion of US$ 5.2 billion in Q1:2024-25 (Table 1).

Table 1: Major Items of India's Balance of Payments
(US$ billion)
	April-June 2024 PR			April-June 2025 P
	Credit	Debit	Net	Credit	Debit	Net
A. Current Account	241.8	250.5	-8.6	256.7	259.1	-2.4
1. Goods	111.2	175.0	-63.8	113.1	181.6	-68.5
of which:
POL	20.6	51.5	-30.9	17.4	49.3	-31.9
2. Services	88.5	48.8	39.7	97.4	49.5	47.9
3. Primary Income	12.7	23.5	-10.9	12.2	25.0	-12.8
4. Secondary Income	29.5	3.2	26.3	34.0	3.0	31.0
B. Capital Account and Financial Account	264.5	256.7	7.9	289.1	285.9	3.2
of which:
1. Direct Investment	23.9	17.7	6.2	27.2	21.5	5.7
2. Portfolio Investment	159.8	158.9	0.9	146.3	144.7	1.6
3. Other Investments	74.5	65.0	9.5	109.9	104.0	5.9
of which:
NRI Deposits	23.4	19.4	4.0	23.8	20.2	3.6
ECBs to India	8.5	6.8	1.6	10.7	7.1	3.7
4. Reserve Assets [Increase (-)/Decrease (+)]	0.0	5.2	-5.2	0.0	4.5	-4.5
C. Errors & Omissions (-) (A+B)	0.8	0.0	0.8	0.0	0.8	-0.8
PR: Partially Revised; and P: Preliminary.
Note: Total of sub-components may not tally with aggregate due to rounding off.