India's current account deficit moderated to US$ 12.3 billion (1.3 per cent of GDP) in Q2:2025-26 from US$ 20.8 billion (2.2 per cent of GDP) in Q2:2024-25, the RBI said on Monday. Merchandise trade deficit at US$ 87.4 billion in Q2:2025-26 was lower than US$ 88.5 billion in Q2:2024-25. Net services receipts increased to US$ 50.9 billion in Q2:2025-26 from US$ 44.5 billion a year ago. Services exports have risen on a year-on-year basis in major categories such as computer services and other business services, the central bank noted.

In the financial account, foreign direct investment (FDI) recorded a net inflow of US$ 2.9 billion in Q2:2025-26 as against a net outflow of US$ 2.8 billion in the corresponding period of 2024-25. Foreign portfolio investment (FPI) recorded a net outflow of US$ 5.7 billion in Q2:2025-26 as against a net inflow of US$ 19.9 billion in Q2:2024-25. Net inflows under external commercial borrowings (ECBs) to India amounted to US$ 1.6 billion in Q2:2025-26 as compared with net inflows of US$ 5.0 billion in the corresponding period a year ago.

For the first half of FY26, the current account deficit declined to USD 15 billion or 0.8 per cent of GDP from USD 25.3 billion or 1.3 per cent of GDP in the year-ago period. Net FDI inflows increased to US$ 7.7 billion in H1:2025-26 from US$ 3.4 billion in H1:2024-25. FPI recorded net outflows of US$ 4.1 billion in H1:2025-26 as against net inflows of US$ 20.8 billion a year ago. In H1:2025-26, there was a depletion of US$ 6.4 billion to the foreign exchange reserves (on a BoP basis) as against an accretion of US$ 23.8 billion in the corresponding period a year ago.

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