India's balance of payments returned to surplus in August 2026

Traders Union
All News
Central Banks
India balance of payments surplus

Highlights

India's current account deficit stood at US$5.2 billion in August 2026, down from US$6.1 billion in August 2025.
The capital account posted a net surplus of US$50.6 billion in August 2026, mainly due to inflows from banking capital and NRI deposits.
From April to August 2026, the overall balance of payments remained in surplus by US$58.0 billion, strengthening foreign exchange reserves.

This article was translated from the original. Read the original version by our correspondent here.

Key balance of payments trends in August 2026

According to the RBI press release, India's net current account deficit stood at US$5.2 billion in August 2026, down from US$6.1 billion in August 2025. Over the same period, the merchandise trade deficit narrowed from US$27.6 billion to US$26.6 billion, while exports rose from US$35.1 billion to US$44.7 billion and imports increased from US$62.7 billion to US$71.3 billion.

The net services surplus stood at US$16.5 billion in August 2026, up from US$15.6 billion a year earlier. Net transfers increased to US$12.8 billion, while the net income account recorded a deficit of US$8.0 billion, higher than US$6.3 billion in the previous year.

From April to August 2026, the net current account deficit stood at US$18.3 billion, compared with US$12.8 billion in the corresponding period a year earlier. During this period, merchandise exports amounted to US$219.9 billion and merchandise imports to US$366.0 billion, while the net services surplus was US$85.8 billion and net transfers were US$66.8 billion.

Capital flows and impact on the external sector

The capital account recorded a net surplus of US$50.6 billion in August 2026, significantly higher than US$0.5 billion in August 2025. The increase was driven primarily by net banking capital inflows of US$64.7 billion and net NRI deposit inflows of US$83.0 billion.

In the same month, net foreign direct investment inflows stood at US$3.3 billion, while foreign portfolio investment recorded net inflows of US$1.7 billion. In contrast, external commercial borrowings registered net outflows of US$22.4 billion, indicating that the strength of the capital account depended broadly on banking channels.

From April to August 2026, the capital account posted a net surplus of US$76.3 billion, substantially higher than US$12.0 billion in the corresponding period of the previous year. During this period, the overall balance of payments remained in surplus by US$58.0 billion, while monetary movements increased by US$58.0 billion, providing supportive signals for India's external-sector liquidity and foreign exchange reserve position.

In our previous report, in the context of the IMF update, we assessed the pressures on the external balance alongside India's growth prospects—particularly from higher crude oil prices. The article highlighted current account deficit forecasts for FY27–FY28, relatively strong domestic demand and the role of services, as well as the need to maintain economic resilience amid global uncertainty.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.