The Reserve Bank of India released preliminary figures showing that India’s current account swung from a $1.2 b surplus in June 2025 to a $6.2 b deficit in June 2026. This shift highlights a growing imbalance in the country’s external payments. The change is largely due to the widening gap between merchandise exports and imports.
In June 2026, the merchandise trade deficit rose to $30.2 b, up from $19.2 b a year earlier. Exports grew to $41.2 b, while imports surged to $71.4 b, outpacing the rise in exports. The faster increase in imports widened the trade gap.
Services, however, continued to provide a cushion. The services surplus increased to $17.9 b from $16.2 b a year ago. Services exports reached $36.4 b, and imports rose modestly to $18.5 b, keeping the surplus positive.
Net transfers also grew, reaching $11.9 b in June from $10.9 b. Meanwhile, the net income deficit narrowed to $5.8 b from $6.8 b, showing a slight improvement in earnings from abroad.
On the capital side, India attracted $9.1 b in net inflows in June, compared with a $1.6 b outflow in the same month last year. Foreign direct investment stood at $1.3 b, while foreign portfolio investment contributed a net inflow of $2.5 b. Overall, the capital account posted a positive balance of $2.9 b versus a $0.4 b deficit in June 2025.
During the April–June quarter, the merchandise trade deficit widened to $85.7 b from $68.9 b, while the services surplus grew to $52.2 b from $47.9 b. Net transfers increased to $41.4 b compared with $30.9 b a year earlier. The quarterly overall balance turned negative at $8.1 b, against a positive $4.5 b in the previous year.
These preliminary numbers suggest that India’s external position is under pressure, mainly due to higher imports of goods. While services and capital inflows provide support, the widening trade gap could pose challenges for policymakers. Monitoring subsequent data will be crucial for understanding the long‑term trend.