India’s current account deficit widens to $7 billion in July
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India’s current account deficit (CAD) widened to $7 billion in July 2026 from $3.2 billion in the same month last year.
It is mainly due to a higher merchandise trade deficit, according to preliminary balance of payments data released by the Reserve Bank of India on Tuesday.
The merchandise trade deficit increased to $31.7 billion in July from $28.2 billion a year earlier. Merchandise imports rose to $76.8 billion from $65.6 billion, while exports increased to $45.1 billion from $37.4 billion.
The increase in the current account deficit was partly offset by a higher net services surplus, which rose to $17.6 billion from $16.4 billion. Services exports stood at $38.3 billion and imports at $20.6 billion.
Net transfers increased to $13.2 billion in July from $12.6 billion a year earlier, while net income outgo widened to $6.1 billion from $4 billion.
The capital account recorded a net inflow of $27.7 billion in July, sharply higher than the $3.5 billion inflow recorded in the year-ago period.
Net foreign direct investment inflows rose to $7.3 billion from $4.5 billion, while net foreign portfolio investment recorded an inflow of $4.1 billion, compared with an outflow of $2.5 billion in July 2025.
The overall balance stood at a surplus of $20.8 billion in July 2026, compared with $0.3 billion a year earlier.
For April-July 2026-27, the current account deficit stood at $11.2 billion, compared with $6.6 billion in the corresponding period of 2025-26. The capital account recorded a net inflow of $23.9 billion, against $11.4 billion a year earlier, while the overall balance showed a surplus of $12.7 billion, up from $4.8 billion.