Overview
- Reserve Bank of India data released Monday shows a Q4 FY26 current account surplus of $7.1 billion, equal to 0.7% of GDP, supported by higher services earnings and remittances.
- The merchandise trade deficit widened sharply to $83.4 billion in Q4 from $59.3 billion a year earlier, which materially narrowed the surplus despite stronger invisible receipts.
- Net services receipts rose to $60.4 billion in Q4 as computer services and other business services exports grew, while personal transfers (remittances) climbed to $43.5 billion.
- Capital flows were mixed in FY26 with net FDI strengthening to $6.9 billion for the year while foreign portfolio investors pulled out $16.4 billion, a swing that drained BoP financing.
- On a balance-of-payments basis, reserves rose by $7.2 billion in Q4 but fell by $23.6 billion for FY26, a pattern that leaves external buffers and policy options under close watch.