Business News | India Posts USD 2 Billion Current Account Deficit in May as Merchandise Trade Gap Widens: RBI
Get latest articles and stories on Business at LatestLY. India recorded a current account deficit of USD 2 billion in May 2026 as a wider merchandise trade gap offset healthy net services receipts and transfers, according to the Reserve Bank of India's (RBI) preliminary Balance of Payments (BoP) data. Despite the monthly deficit, the country posted a current account surplus of USD 2.8 billion during the April-May 2026 period.
New Delhi [India], July 16 (ANI): India recorded a current account deficit of USD 2 billion in May 2026 as a wider merchandise trade gap offset healthy net services receipts and transfers, according to the Reserve Bank of India's (RBI) preliminary Balance of Payments (BoP) data. Despite the monthly deficit, the country posted a current account surplus of USD 2.8 billion during the April-May 2026 period.
The RBI data showed that the merchandise trade deficit widened to USD 27.9 billion in May 2026 from USD 22.6 billion in the corresponding month of last year. Merchandise exports rose to USD 46.1 billion from USD 38.7 billion, while imports increased to USD 74 billion from USD 61.3 billion over the same period.
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Net services receipts remained largely unchanged at USD 15.7 billion in May 2026 compared with USD 15.8 billion a year ago. Net transfers increased to USD 13.6 billion from USD 10.5 billion, while net income outflows rose to USD 3.4 billion from USD 3 billion in May 2025.
During April-May 2026, the current account registered a surplus of USD 2.8 billion, reversing a deficit of USD 4.1 billion recorded in the corresponding period of the previous year. Over the two-month period, the merchandise trade deficit widened to USD 55.9 billion, while net services receipts rose to USD 34.3 billion and net transfers increased to USD 29.6 billion.
On the capital account, India recorded net capital outflows of USD 2.4 billion in May 2026. Net foreign direct investment (FDI) stood at negative USD 0.1 billion, while foreign portfolio investment (FPI) registered net outflows of USD 4.7 billion during the month. Net short-term credit to India, however, remained positive at USD 3.2 billion.
According to the RBI, the overall balance of payments recorded a deficit of USD 4.4 billion in May 2026, compared with a surplus of USD 4.4 billion in May 2025. For the April-May 2026 period, the overall balance showed a deficit of USD 11 billion against a surplus of USD 5 billion in the corresponding period of the previous year. (ANI)
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