India’s Current Account Deficit Widens to $4.2 Billion in April-June Quarter: RBI

India’s current account deficit stood at $4.2 billion in the April-June quarter of 2026-27, according to data released by the Reserve Bank of India (RBI) on Tuesday.

The deficit was equivalent to 0.5% of GDP. In the same quarter a year earlier, India had reported a current account deficit of $3.4 billion, or 0.4% of GDP.

The latest figure was also a reversal from the previous quarter, when India recorded a current account surplus of $6.5 billion.

A wider merchandise trade deficit was the main reason behind the change. The gap between merchandise exports and imports increased to $86.1 billion in the April-June quarter, compared with $68.9 billion during the same period last year.

India's services sector, however, continued to provide support to the external account. Net services receipts rose to $51.6 billion during the quarter from $47.9 billion a year earlier.

Remittances also increased during the period. Private transfer receipts, which include money sent by Indians living and working abroad, rose to $42.9 billion from $33.2 billion in the April-June quarter of the previous year.

The increase in services earnings and remittances helped offset part of the pressure from the higher merchandise trade deficit.

The balance of payments recorded a deficit of $8.1 billion during the quarter, compared with a surplus of $4.5 billion in the year-ago period.

The RBI said foreign exchange reserves fell by $8.1 billion on a balance-of-payments basis during the quarter, excluding valuation effects. When valuation changes were included, the decline in reserves was $22.5 billion.

For India, the size of the current account deficit remains closely linked to the country's import bill, merchandise exports, and the performance of service exports. Remittances from Indians abroad continue to be another important source of support for the external account.

The RBI's latest data will be watched closely as markets assess the impact of trade flows, global commodity prices, and foreign exchange movements on India's external position in the months ahead.