India Posts $13.5 Billion Current Account Surplus in Q4 FY25: RBI

India posted a current account surplus of $13.5 billion, equivalent to 1.3% of GDP, in the fourth quarter of FY25 (January–March), according to provisional figures released by the Reserve Bank of India (RBI) on Friday. This marks a significant turnaround from the previous quarter’s deficit of $11.3 billion (1.1% of GDP) and is also a substantial jump from the $4.6 billion surplus (0.5% of GDP) recorded in the same quarter last year.

The surplus was primarily driven by strong performance in services exports and lower net outflows under the primary income account, even though merchandise exports saw moderation. Services earnings rose sharply to $53.3 billion in Q4, up from $42.7 billion during the same period last year, largely due to growth in business and IT services. Remittances from Indians abroad also went up, reaching $33.9 billion compared to $31.3 billion a year ago.

Despite the positive headline figure, the merchandise trade deficit expanded to $59.5 billion in Q4 FY25, from $52.0 billion in the corresponding quarter of the previous year. However, this was an improvement from the $79.3 billion trade gap seen in Q3 FY25.

For the full financial year, India recorded a current account deficit of $23.3 billion (0.6% of GDP), lower than the $26.0 billion deficit (0.7% of GDP) seen in FY24. This improvement came on the back of stronger net inflows from services and secondary income.

On the financial account side, net foreign direct investment (FDI) inflows for Q4 FY25 dropped to $0.4 billion, a steep fall from $2.3 billion in the same quarter of FY24. Foreign portfolio investment (FPI) witnessed a net outflow of $5.9 billion during the quarter, reversing an $11.4 billion inflow a year earlier. For the entire FY25, FDI inflows fell sharply to $1.0 billion from $10.2 billion, while net FPI inflows declined to $3.6 billion from $44.1 billion in FY24.

India’s foreign exchange reserves increased by $8.8 billion in Q4 on a balance of payments basis, though this was lower than the $30.8 billion addition recorded in the same period a year ago. Over the course of FY25, forex reserves saw a net decline of $5.0 billion, compared to an accretion of $63.7 billion in FY24.

Additionally, external commercial borrowings (ECBs) brought in net inflows of $7.4 billion in the March quarter, up from $2.6 billion in the year-ago period. Non-resident Indian (NRI) deposits added $2.8 billion in Q4 FY25, slightly lower than the $5.4 billion recorded in Q4 FY24.

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