India's Current Account Deficit Doubles to $7 Billion in July

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Sep 15, 2026 18:20

India's current account deficit widened to $7 billion in July, more than double last year, driven by a higher merchandise trade deficit, RBI data shows.

India's Current Account Deficit Doubles to $7 Billion in July

Photograph: Dado Ruvic/Reuters

Key Points

India's current account deficit (CAD) reached USD 7 billion in July, more than doubling from USD 3.2 billion a year ago.
The primary reason for the widened CAD was a higher merchandise trade deficit, which rose to USD 31.7 billion.
Despite the CAD, the capital account recorded a significant net inflow of USD 27.7 billion in July.
Net foreign direct investment (FDI) and foreign portfolio investment (FPI) both saw increased inflows during the month.
The overall balance for July stood at a surplus of USD 20.8 billion, a substantial increase from the previous year.

Mumbai, Sep 15 (PTI) India's current account deficit widened to USD 7 billion in July from USD 3.2 billion a year ago, mainly due to a higher merchandise trade deficit, according to the Reserve Bank data released on Tuesday.

The preliminary data on India's balance of payments (BoP) for July 2026 released by the central bank showed that the merchandise trade deficit rose to USD 31.7 billion in July from USD 28.2 billion in the same month last year.

Imports increased to USD 76.8 billion from USD 65.6 billion, while exports rose to USD 45.1 billion from USD 37.4 billion.

On the other hand, there was improvement in net services surplus, which increased to USD 17.6 billion in July from USD 16.4 billion in the year-ago month. Services exports stood at USD 38.3 billion while imports totalled USD 20.6 billion during the month under review.

Net transfers increased to USD 13.2 billion in July 2026 from USD 12.6 billion, while net income outgo widened to USD 6.1 billion from USD 4 billion.

The capital account recorded a net inflow of USD 27.7 billion in July 2026, sharply higher than USD 3.5 billion in the year-ago month.

According to the data, net foreign direct investment inflows rose to USD 7.3 billion in July from USD 4.5 billion a year earlier. Net foreign portfolio investment recorded an inflow of USD 4.1 billion against an outflow of USD 2.5 billion in July 2025.

The overall balance stood at a surplus of USD 20.8 billion in July 2026, compared with USD 0.3 billion in the year-ago month.

For the April-July period of 2026-27, the current account deficit stood at USD 11.2 billion, compared with USD 6.6 billion in the corresponding period of 2025-26.

The capital account recorded a net inflow of USD 23.9 billion during April-July 2026, against USD 11.4 billion a year earlier.

The overall balance was a surplus of USD 12.7 billion, up from USD 4.8 billion a year earlier.

Source: PTI By Rediff Money Desk, Mumbai

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