India's CAD widens to ₹13.2 billion in Q3 on higher trade deficit: RBI

The current account deficit stood at $11.3 billion, or 1.1 per cent of GDP, in the corresponding quarter of 2024-25

The Reserve Bank of India (RBI) said India’s current account deficit (CAD) widened to $13.2 billion, or 1.3 per cent of GDP, in the third quarter of 2025–26 (October–December), according to preliminary data on the balance of payments. The deficit stood at $11.3 billion, or 1.1 per cent of GDP, in the corresponding quarter of 2024–25.

 

The data formed part of the RBI’s preliminary balance of payments statement for the third quarter of 2025–26.

Merchandise trade gap expands

The merchandise trade deficit increased to $93.6 billion in Q3FY26 from $79.3 billion a year earlier, the data released by the RBI showed. Within the current account, goods exports amounted to $111.7 billion, while imports stood at $205.3 billion during the quarter, resulting in a net goods deficit of $93.6 billion, as per the RBI.

 

Services receipts record growth

Net services receipts rose to $57.5 billion in Q3FY26 from $51.2 billion in Q3FY25. The RBI stated that services exports increased on a year-on-year basis in major categories such as computer services and other business services.

Primary income outgo declines; remittances rise

Net outgo under the primary income account, which mainly reflects investment income payments, declined to $12.2 billion in Q3FY26 from $16.4 billion in the year-ago quarter.

 

According to the RBI, personal transfer receipts under the secondary income account, representing remittances by Indians employed overseas, increased to $36.9 billion from $35.1 billion a year earlier.

Financial account trends

In the financial account, foreign direct investment (FDI) recorded a net outflow of $3.7 billion in Q3FY26, compared with a net outflow of $2.8 billion in Q3FY25, the data showed.

 

According to the RBI, foreign portfolio investment (FPI) registered a net outflow of $0.2 billion during the quarter, lower than the net outflow of $11.4 billion in the same period last year. Non-resident deposits recorded a net inflow of $5.1 billion, higher than $3.1 billion a year earlier.

 

Net inflows under external commercial borrowings (ECBs) amounted to $3.3 billion, compared with $4.4 billion in Q3FY25, the RBI said.

 

Foreign exchange reserves declined by $24.4 billion on a balance of payments basis in Q3FY26, compared with a depletion of $37.7 billion in the corresponding quarter of the previous year.

April–December position

For April–December 2025, the current account deficit moderated to $30.1 billion, or 1.0 per cent of GDP, from $36.6 billion, or 1.3 per cent of GDP, in April–December 2024, the data published by the RBI showed.

 

Net invisibles receipts, comprising services, primary income and secondary income accounts, stood at $221.5 billion during April–December 2025, higher than $191.0 billion a year earlier, the RBI said.

 

Net FDI inflows increased to $3.0 billion in April–December 2025 from $0.6 billion in the corresponding period of 2024. FPI recorded net outflows of $4.3 billion in April–December 2025, as against net inflows of $9.4 billion a year earlier.

 

Foreign exchange reserves declined by $30.8 billion during April–December 2025 on a balance of payments basis, compared with a depletion of $13.8 billion in the same period last year, the RBI said.