India's External Balance: Surging Services Reverse Current Account into Surplus Despite Capital Outflows

India's current account achieved a surplus of USD 4.7 billion in April 2026 due to rising services exports and remittances. However, significant capital outflows resulted in an overall Balance of Payments deficit of USD 6.6 billion. The stark contrast in real and financial economy flows marks a challenging divergence.

India's external balance saw significant shifts in April 2026, as the current account recorded a surplus of USD 4.7 billion, reversing the deficit of USD 4.8 billion from the same period last year, according to the Reserve Bank of India.

This positive change was largely propelled by an increase in services exports, growing from USD 32.8 billion to USD 37 billion, boosting the services surplus to USD 18.6 billion. Net transfers also soared to USD 16 billion from USD 9.4 billion, showcasing considerable inflow from overseas remittances. Despite these gains, the merchandise trade deficit widened as imports outpaced exports, with import value climbing from USD 72.5 billion compared to exports at USD 44.6 billion.

Conversely, the capital account experienced a downturn, recording a deficit of USD 11.3 billion due to substantial foreign portfolio investment outflows of USD 8.7 billion. This shift, along with negative banking capital figures, led the overall Balance of Payments into a USD 6.6 billion deficit, marking a notable disparity between robust real economy flows and volatile financial inflows.