New Delhi: India’s current account deficit widened to USD 7.4 billion in September 2026 from USD 5.2 billion a year earlier, as a sharp increase in net income outflows outweighed an improvement in the merchandise trade balance, according to preliminary Reserve Bank of India data released on Friday.
Net outgo under the income account more than tripled to USD 7.6 billion from USD 2.2 billion in September 2025. Net transfers also declined to USD 10.9 billion from USD 11.5 billion.
A current account deficit arises when a country’s payments abroad for goods, services, income and transfers exceed its corresponding receipts.
The merchandise trade deficit narrowed to USD 30 billion in September from USD 33.4 billion a year earlier, as exports increased faster than imports.
Merchandise exports rose to USD 45.3 billion from USD 36.4 billion, while imports increased to USD 75.3 billion from USD 69.8 billion.
Net services receipts edged up to USD 19.2 billion from USD 18.8 billion. Services exports increased to USD 39.3 billion from USD 36.7 billion, while imports rose to USD 20.1 billion from USD 17.8 billion.
During April–September FY27, the current account deficit widened to USD 25.8 billion from USD 18 billion in the corresponding period of the previous financial year.
The merchandise trade deficit increased to USD 176.1 billion from USD 158.1 billion. Imports rose to USD 441.4 billion from USD 379.6 billion, while exports increased to USD 265.3 billion from USD 221.5 billion.
Higher services receipts and transfers provided a partial cushion. Net services receipts rose to USD 105 billion from USD 98.8 billion, while net transfers increased to USD 77.7 billion from USD 67.2 billion.
Net capital inflows stood at USD 16.2 billion in September, compared with an outflow of USD 400 million a year earlier.
Banking capital recorded net inflows of USD 22.2 billion, up from USD 700 million. Within this, non-resident Indian deposits contributed net inflows of USD 3.7 billion, against USD 400 million a year earlier.
However, foreign portfolio investment registered a net outflow of USD 6.7 billion, compared with USD 600 million. Net foreign direct investment outflows increased to USD 4.9 billion from USD 2.3 billion.
India’s overall balance of payments recorded a surplus of USD 8.8 billion in September, reversing a deficit of USD 5.6 billion a year earlier. For April–September, the surplus stood at USD 66.8 billion, against a deficit of USD 6.4 billion in the corresponding period last year.
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