Current account surplus doubled in the fourth quarter, accounting for 1.3% of GDP: 10 things

India Current Account Earnings Data News: India’s current account surplus in the last quarter of the previous fiscal year showed $13.5 billion, showing data released by the Reserve Bank of India (RBI) on Friday. Thar’s jumped more than twice in his surplus in $4.6 billion a year ago. Now, what is the current account surplus and how is it different from the current account deficit? A current account surplus occurs when a country’s exports exceed imports, which indicates that foreign exchange inflows (forex) are considered to be beneficial to the economy. A country’s current account surplus indicates its status as a global net lender and vice versa.

This is 10 Things to Know About the latest current account data:

• The Q4 FY25 figure marks a reversal of $11.3 billion in the October-December period, accounting for 1.1% of GDP.
• The country’s current account deficit was USD 23.3 billion throughout the fiscal year 2024-25 (FY25). It represents 0.6% of GDP.
• However, the full-year figures mark an increase in the $26 billion (0.7%) deficit in the previous year.

• Net expenditure on basic income accounts – payments converted to investment income, adjusted from $14.8 billion a year ago to $11.9 billion in Q4.

• In the financial account, foreign direct investment net inflows in the fourth quarter of the same period last year was US$400 million.

• Net inflows under external commercial lending (ECB) were $7.4 billion in the March quarter, marking a 2.8-fold increase over the previous year.

• The country’s service exports jumped in the fourth quarter, although commodity exports were adjusted.
• Net service revenue increased from $42.7 billion a year ago to $53.3 billion in Q4.
• According to the RBI, major groups of services exported, such as commercial services and computer services, rose.

• Net inflows of NRI deposits were $4.4 billion, marking a decline of $5.4 billion a year ago.

India’s CAS exceeds doubles | What economists say

“While the current account balance expectedly reported a seasonal surplus in Q4 FY2025, the size of the same overshot our expectations, amid a surprise divide in primary income outflows in the quarter. This led to the unexpected narrowing in the CAD to 0.6 per cent of GDP in FY2025 from 0.7 per cent in FY2024,” said Aditi Nayar, Chief Economist and Head-Research and Outreach at ICRA.

In the midst of the expansion of the commodity trade deficit and expected expectations for the first quarter of the service trade surplus, Nair expects the current account to resume its deficit in the ongoing quarter, printing about 1.3% of GDP.

“We foresee a current account deficit of 1% of GDP in fiscal 2026, assuming the average crude oil price this fiscal year is about $70 per barrel, which is manageable despite prevalent global uncertainty.”