India's current account deficit widens to $25.8 billion in April-September as bank deposits from abroad lift the balance of payments to a $66.8 billion surplus

India’s current account deficit widened to $25.8 billion in April-September 2026, from $18 billion in the same months last year, according to Reserve Bank of India data released on Friday evening. The overall balance of payments, which also counts money flowing in through investment and banking channels, went the other way: a $66.8 billion surplus, against a deficit of $6.4 billion a year earlier.

The two numbers tell different stories. The wider deficit shows a country paying more for imports and for foreign capital than it earns from abroad. The surplus shows that far more foreign money came in than was needed to cover the gap, which is what lets the RBI add to its reserves and steady the rupee.

Where the gap came from

The goods trade deficit was $176.1 billion in the first half, up from $158.1 billion. Merchandise exports rose to $265.3 billion from $221.5 billion, but imports climbed faster, to $441.4 billion from $379.6 billion. That is a rise of more than $60 billion in the import bill in a year when crude oil has stayed expensive.

Services again cushioned the blow. Net services exports were $105 billion, up from $98.8 billion, and net transfers, mostly money sent home by Indians working abroad, rose to $77.7 billion from $67.2 billion. Working against those gains, the net income deficit, which covers interest, dividends and profits paid to foreign investors and lenders, grew to $32.4 billion from $25.8 billion.

September alone

For September, the current account deficit was $7.4 billion, against $5.2 billion a year earlier. The goods trade deficit narrowed to $30 billion from $33.4 billion. The overall balance of payments was an $8.8 billion surplus, compared with a $5.6 billion deficit in September 2025, but far below the $45.4 billion surplus of August, which we reported last month.

The September month also had a weaker side. Foreign portfolio investors were net sellers of $6.7 billion, against $0.6 billion a year ago, and net foreign direct investment outflows widened to $4.9 billion from $2.3 billion.

A flood of bank deposits

The capital account surplus for April-September was $92.6 billion, compared with $11.6 billion in the same period of 2025-26. Almost all of the swing came from banking capital, which brought in $125.2 billion against $0.3 billion a year earlier. NRI deposit inflows were $125.6 billion, against $6.1 billion.

Other channels moved the other way. Net portfolio investment was an outflow of $10.4 billion, compared with $4.1 billion last year. External commercial borrowings, the loans Indian companies raise abroad, saw net outflows of $40.6 billion, against net inflows of $7.2 billion. Net foreign direct investment for the half year was an inflow of $8.8 billion, up from $7.4 billion.

April-September 2026 at a glance

• $25.8 bncurrent account deficit, from $18 bn
• $66.8 bnbalance of payments surplus, from a $6.4 bn deficit
• $125.2 bnnet banking capital inflows
• $40.6 bnnet outflows on external commercial borrowings

What analysts say

Gaura Sen Gupta of IDFC First Bank said “India’s BoP outlook is showing signs of meaningful improvement.” She expects the balance of payments to move toward balance or a modest surplus in the second half of the financial year, which suggests the first-half surplus owes much to a one-off rush of deposits rather than a lasting trend.

Aditi Nayar of Icra has said she expects the current account deficit to stay a “modest 0.9 per cent of GDP” in 2026-27, even with oil prices high.

The trade numbers that came the same day

The commerce ministry’s October figures, also released on Friday, show how much energy prices are weighing on the account. October exports were a record $49.47 billion, up 45%, but imports also hit a record $89.35 billion, up 16.5%, leaving a trade deficit of $39.88 billion. Crude oil imports rose 54% to $22.82 billion as the Indian basket of crude hit $119.91 a barrel, the highest in more than 14 years. Gold imports, by contrast, fell about 63% to $5.51 billion.

For the April-October period, exports were $309.06 billion and imports $527.21 billion, a trade deficit of $218.15 billion. Our report on September’s exports has the earlier trend.

Why it matters

The current account is the broadest measure of whether India lives within its foreign earnings. A larger deficit means more reliance on foreign money, which can be volatile: the first-half data show that portfolio investors and company borrowers both pulled money out, and that bank deposits from abroad filled the hole. For households, that matters through the rupee and the price of imported fuel. The RBI’s own reserves, which stood near $719 billion in the week to November 6 according to our earlier report, are the cushion built from these inflows.

What next

The commerce ministry’s services figures for October are estimates, and the RBI is due to publish its final services data later this month. The central bank’s detailed quarterly balance of payments release, which gives the deficit as a share of GDP, was not part of the figures reported on Friday.