For the full year 2025-26, India actually ran a current account deficit of $25.2 billion (0.6% of GDP), slightly wider than the $22.9 billion deficit the year before. Two forces pulled the March-quarter balance down. First, the gold import bill ballooned to $22.57 billion in the quarter (and $71.97 billion for the full year), far above the $9.5 billion and $58 billion of the previous year. Second, foreign portfolio investors (FIIs) pulled out $12 billion in the March quarter, up from $5.9 billion a year earlier — partly linked to the West Asia crisis that began in late February. Holding the balance up were strong service exports and money sent home by Indians abroad.
The Ripple
🇮🇳 Nation: India still earned more than it spent on day-to-day dealings in the quarter, but the cushion shrank, leaving the country more exposed if oil or gold bills climb further. The full-year picture flipped to a small deficit of $25.2 billion.
🏭 Sector: India's services engine held firm — net services receipts rose to $60.4 billion from $53.3 billion, led by computer services and other business services, while the goods trade deficit widened to $83.4 billion from $59.3 billion.
🧍 You: a thinner surplus and heavier FII outflows put mild pressure on the rupee, which over time can make petrol, gadgets and foreign travel a little costlier.
Who Gains, Who Loses
Holding India up: Indians working abroad, whose remittances rose to $43.5 billion from $33.9 billion, and the IT/services sector, which kept exports strong. Foreign direct investment also improved, to a net $4.2 billion from just $0.4 billion a year ago. Dragging India down: the surging gold import bill and FIIs who sold $12 billion of Indian assets, converting rupees back to dollars on the way out. External commercial borrowings (loans from abroad) also fell to $3.6 billion from $7.5 billion.
India's external accounts are still steady, not in danger — the surplus shrank but services and remittances kept it afloat, and forex reserves still rose by $7.2 billion in the quarter. The thing to watch is gold and oil import bills plus FII mood: if the West Asia crisis worsens and foreign money keeps leaving, the rupee feels it first, and your import-linked costs follow.
Key facts
Key players
- Reserve Bank of India
- Foreign Institutional Investors (FIIs)
- Indians working overseas
Key numbers
- $7.1 billion Q4 current account surplus (0.7% of GDP)
- $13.7 billion surplus a year earlier (1.4% of GDP)
- $12 billion FII outflows (vs $5.9 billion)
- $25.2 billion full-year 2025-26 deficit (0.6% of GDP)
- $71.97 billion full-year gold import bill
- $60.4 billion net services receipts
- $43.5 billion remittances
Key dates
- Quarter ended March 2026
- West Asia crisis began late February 2026