India records $13.5 billion current account surplus in March quarter, says RBI

India recorded a current account surplus of $13.5 billion, or 1.3% of GDP, in the fourth quarter of FY25 (January–March), according to preliminary data released by the Reserve Bank of India (RBI) on Friday.

This comes as a reversal from a deficit of $11.3 billion or 1.1% of GDP in the October-December quarter of 2024-25, mainly due to a higher trade gap, and a sharp rise from a surplus of $4.6 billion (0.5% of GDP) in the same quarter last year.

For the full year FY25, India recorded a current account deficit of $23.3 billion (0.6% of GDP), an improvement from $26.0 billion (0.7% of GDP) in FY24. The improvement was led by higher net receipts under services and secondary income, the RBI said.

While merchandise exports moderated, the surplus in Q4 was driven by strong services exports and a lower net outgo on the primary income account, RBI data shows.

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Net services receipts rose to $53.3 billion from $42.7 billion a year ago, supported by growth in business and computer services. Personal transfer receipts, largely remittances by Indians abroad, also increased to $33.9 billion from $31.3 billion in the corresponding period last year. However, the merchandise trade deficit widened to $59.5 billion in Q4 FY25 from $52.0 billion in Q4 FY24, although it moderated from $79.3 billion in Q3.In the financial account, the RBI said, net foreign direct investment (FDI) inflows stood at $0.4 billion during Q4, down from $2.3 billion a year earlier. Foreign portfolio investment (FPI) recorded a net outflow of $5.9 billion, in contrast to an inflow of $11.4 billion in the same period last year.

As for the full year, FDI inflows for the year stood at $1.0 billion, sharply down from $10.2 billion in the previous year. FPI net inflows also fell to $3.6 billion from $44.1 billion in FY24.

India’s foreign exchange reserves increased by $8.8 billion on a balance of payments basis in the March quarter, lower than the $30.8 billion accretion in the year-ago period. Meanwhile, forex reserves in FY25 saw a net depletion of $5.0 billion during FY25, as compared to an accretion of $63.7 billion in FY24.

The RBI also noted that net inflows under external commercial borrowings (ECBs) to India amounted to $7.4 billion in Q4FY25, as compared to $2.6 billion in the corresponding period a year ago. Non-resident deposits (NRI deposits) recorded a net inflow of $2.8 billion in the March quarter, lower than $5.4 billion a year ago.