India's Q4 Economic Bounce: Current Account Surplus Surpasses Expectations

India achieved a current account surplus of USD 13.5 billion (1.3% of GDP) in Q4 2024-25, a significant increase from USD 4.6 billion in the same quarter last year. This was driven by a surge in services exports and remittances. However, on an annual basis, the current account was in deficit.

In a noteworthy economic development, India posted a current account surplus of USD 13.5 billion or 1.3% of GDP during the March quarter of 2024-25, marking a substantial rise from the previous year's figure of USD 4.6 billion. This financial upturn was largely propelled by soaring services exports and an increase in remittances, according to data released by the Reserve Bank of India (RBI) on Friday.

Despite the quarterly surplus, the annual figures painted a different picture. For the fiscal year 2024-25, India registered a current account deficit of USD 23.3 billion, equivalent to 0.6% of GDP. This figure is an improvement over the USD 26 billion deficit accounted in the previous fiscal, thanks to higher net invisibles receipts.

Though the merchandise trade deficit increased to USD 59.5 billion in Q4 2024-25 from USD 52 billion a year earlier, it demonstrated a moderation from the prior quarter's USD 79.3 billion. The net services receipts, which include exports in business and computer services, increased significantly, further bolstering the financial account.