India Records Current Account Surplus Amid Fiscal Shifts

India achieved a current account surplus of USD 13.5 billion in Q4 of 2024-25, marking an improvement from the previous year. This fiscal change comes despite an annual deficit of USD 23.3 billion, as net invisibles receipts rose. The trade deficit widened, yet services exports soared.

In a significant financial development, India reported a current account surplus of USD 13.5 billion, equivalent to 1.3% of its GDP, for the January-March quarter of the 2024-25 fiscal year, according to figures released by the Reserve Bank of India (RBI). This marks a considerable increase from the USD 4.6 billion surplus, or 0.5% of GDP, recorded during the same period the previous year.

Despite the overall annual current account deficit standing at USD 23.3 billion, a reduction from USD 26 billion the prior year, the improvement is attributed to increased net invisibles receipts. However, the merchandise trade deficit has also seen a rise, reaching USD 59.5 billion in Q4:2024-25 compared to USD 52 billion in Q4:2023-24.

Interestingly, net services receipts showed a steep increase, climbing to USD 53.3 billion in Q4:2024-25 from USD 42.7 billion the previous year, driven by robust growth in major export categories such as business and computer services.

(With inputs from agencies.)