The current account deficit for April-July 2026 stood at $11.2 billion, compared with $6.6 billion in the corresponding period a year earlier. The widening gap came as merchandise imports rose faster than exports, pushing the goods trade deficit to $117.8 billion during the first four months of the financial year, from $97.1 billion a year earlier.
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Merchandise exports increased to $45.1 billion in July from $37.4 billion a year earlier, while imports rose to $76.8 billion from $65.6 billion. This widened the monthly merchandise trade deficit to $31.7 billion from $28.2 billion. Between April and July, exports rose to $177.1 billion from $150 billion, while imports increased to $294.9 billion from $247.1 billion.
Net services receipts increased to $17.6 billion in July from $16.4 billion a year earlier. For April-July, net services exports rose to $69.3 billion from $64.3 billion, with services exports increasing to $144.5 billion from $131.2 billion.
Net transfer receipts, which include remittances, rose to $13.2 billion in July from $12.6 billion a year earlier. For April-July, transfers increased to $53.9 billion from $43.4 billion. However, net income outflows widened to $6.1 billion in July from $4 billion, although the April-July outflow narrowed marginally to $16.6 billion from $17.3 billion.
India’s net capital account balance rose sharply to $27.7 billion in July from $3.5 billion a year earlier. During April-July, net capital flows increased to $23.9 billion from $11.4 billion.Foreign direct investment (FDI) inflows remained a key source of capital, with net FDI rising to $7.3 billion in July from $4.5 billion. Net FDI for April-July increased to $13.4 billion from $9.7 billion. Gross inflows into India rose to $10.7 billion in July from $7.2 billion, while outward FDI increased to $3.4 billion from $2.7 billion.
Foreign portfolio investment flows turned positive in July, with net inflows of $4.1 billion compared with an outflow of $2.5 billion a year earlier. However, for April-July, net FPI flows remained negative at $5.5 billion, compared with an outflow of $0.9 billion in the year-earlier period.
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External commercial borrowings recorded a net outflow of $2.3 billion in July, compared with a net inflow of $1.4 billion a year earlier. The April-July balance also turned negative at $1.3 billion, against a net inflow of $6.8 billion in the corresponding period last year.
Banking capital flows rose to $18.4 billion in July from $6 billion a year earlier. Non-resident Indian deposits accounted for $33.5 billion of net inflows during the month, compared with $1 billion a year earlier. For April-July, NRI deposits recorded net inflows of $36.2 billion, against $4.7 billion in the corresponding period last year.
The overall balance of payments recorded a surplus of $20.8 billion in July, compared with $0.3 billion a year earlier. For April-July, the overall balance stood at $12.7 billion, against $4.8 billion in the year-earlier period.