India's external position improved in trade and services, but capital outflows, particularly in portfolio investment, dragged the overall balance into deficit in April 2026, according to data released by the Reserve Bank of India (RBI).
Current Account Surplus
As per the preliminary Balance of Payments (BoP) data shared by the central bank on Monday, India's current account turned into a surplus of USD 4.7 billion in April 2026, compared to a deficit of USD 4.8 billion in the same month last year. This improvement was driven primarily by a strong rise in services exports and higher remittance inflows.
Services exports increased to USD 37.0 billion from USD 32.8 billion a year earlier, widening the services surplus to USD 18.6 billion, as per the RBI data. Additionally, net transfers surged to USD 16.0 billion from USD 9.4 billion, reflecting robust inflows from Indians working abroad.
Trade Deficit Widens
However, the merchandise trade deficit widened marginally as imports grew faster than exports. Exports rose to USD 44.6 billion, while imports increased to USD 72.5 billion.
Capital Account Reversal
On the financial side, the capital account witnessed a sharp reversal, slipping into a deficit of USD 11.3 billion compared to a surplus of USD 5.3 billion in April 2025. This was largely driven by significant outflows in foreign portfolio investment, which widened to USD 8.7 billion from USD 2.1 billion a year earlier. Banking capital also turned negative at USD 3.7 billion, while other capital flows registered a steep decline.
Foreign direct investment provided some cushion, rising strongly to USD 7.4 billion from USD 1.6 billion, indicating continued interest in long-term investments in India.
Overall BoP Deficit
Despite the improvement in the current account, the overall Balance of Payments slipped into a deficit of USD 6.6 billion in April 2026, compared to a surplus of USD 0.5 billion a year earlier. The shift highlights a key divergence in India's external position: while real economy flows such as services and remittances remain strong, financial flows have become more volatile due to foreign investor outflows.
