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India’s current account surplus narrowed sharply to $7.1 billion, or 0.7% of GDP, in the fourth quarter ended March 2026, as a rising gold import bill and foreign investor outflows weighed on external balances, according to data released by the Reserve Bank of India (RBI) on Monday.
This marks a notable decline from the surplus of $13.7 billion, or 1.4% of GDP, recorded during the corresponding quarter of the previous financial year.
The moderation in the current account surplus reflects changing dynamics in India’s external sector, with factors such as trade flows, services exports, remittances and investment income influencing the overall balance.
Despite remaining in surplus territory, the lower figure indicates a reduced contribution from external earnings compared to the year-ago period. FII outflows increased to $12 billion in March 2026 quarter as against outflows of $5.9 billion in the same period a year ago.
Gold import bill for the March 2026 quarter was $ 22.57 billion and full year at $ 71.97 billion as against $9.5 billion and $ 58 billion respectively in the previous year, RBI data says.
The RBI’s latest data highlights the evolving balance of payments position amid global economic uncertainties, especially the West Asia crisis which started in late February, and shifting trade patterns, while underscoring the resilience of India’s external sector.
However, in full year of 2025-26, India’s current account deficit widened slightly to $ 25.2 billion, equivalent to 0.6% of GDP, compared with $ 22.9 billion (0.6% of GDP) in 2024-25.
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Net invisibles receipts increased significantly to $ 312.0 billion from $ 264.0 billion in the previous year, driven mainly by higher net services earnings and stronger net personal transfer inflows, the central bank said.
Merchandise trade deficit at $83.4 billion in Q4 of 2025-26 was higher than $59.3 billion a year ago. Net services receipts increased to $ 60.4 billion from $ 53.3 billion a year ago, according to the RBI.
Services exports have risen on a year-on-year basis in major categories such as computer services and other business services. Net outgo on the primary income account, mainly reflecting payments of investment income, decreased to $11.1 billion in Q4 of 2025-26 from $11.9 billion in Q4 of last year, the RBI said.
Personal transfer receipts under secondary income account, mainly representing remittances by Indians employed overseas, rose to $43.5 billion in the latest quarter from $33.9 billion in Q4 of last year.
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In the financial account, foreign direct investment (FDI) recorded a net inflow of $4.2 billion, higher than $0.4 billion in March quarter of 2025.
Non-resident deposits (NRI deposits) recorded a net inflow of $3.3 billion in the quarter higher than $2.8 billion in Q4 of 2024-25.
Net inflows under external commercial borrowings (ECBs) to India amounted to $3.6 billion in Q4 as compared to $7.5 billion a year ago, the RBI said. Forex reserves increased by $7.2 billion (on a BoP basis) in Q4 of 2025-26 as compared to an accretion of $8.8 billion a year ago.
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