The data released by the Reserve Bank of India (RBI) has showed that India’s current account deficit (CAD) edged up to $13.2 billion or 1.3% of Gross Domestic Product (GDP), in the December quarter of FY26 (Q3FY26) from $11.3 billion or 1.1% of GDP in the year-ago period. The CAD widened mainly due to higher trade deficit.

On the merchandise front, the country’s trade deficit has grown 18% to $93.6 billion during Q3FY26 from $79.3 billion in the same quarter last year. Meanwhile, net services receipts have increased by 12.3% to $57.5 billion in Q3FY26 as compared to $51.2 billion in same quarter last year. The services exports have risen on a year-on-year basis in major categories such as computer services and other business services. Further, net outgo on the primary income account, mainly reflecting payments of investment income, has declined 25.61% to $12.2 billion during Q3FY26 as compared to $16.4 billion in year ago period.

However, the CAD has moderated to $30.1 billion or 1% of GDP during in April-December 2025, from $36.6 billion or 1.3% of GDP in the same period a year ago. During the April-December 2025 period, the country’s net foreign direct investment (FDI) inflows rose four-fold to $3.0 billion from $ 0.6 billion in during the same period last year. However, the FPI recorded net outflows of $4.3 billion in April-December 2025 period as against net inflows of $9.4 billion a year ago. Further, the foreign exchange reserves depleted by $30.8 billion (on a BoP basis) during the April-December 2025 period as compared with a depletion of $13.8 billion in the same period last year.