India’s external sector strengthened in the fourth quarter of FY26, with the country recording a current account surplus of $7.1 billion, equivalent to 0.7% of gross domestic product (GDP), according to data released by the Reserve Bank of India (RBI).
The surplus was driven largely by strong growth in services exports and healthy remittance inflows from Indians working overseas. These earnings helped counterbalance a wider merchandise trade deficit during the January-March quarter.
India’s services sector remained a key contributor to foreign exchange earnings. Exports from information technology, business process management, financial services and professional services continued to perform strongly, generating substantial revenue from overseas markets. Economists noted that India’s services exports have become an increasingly important pillar of the country’s external account.
Remittances from non-resident Indians also remained robust, providing additional support to the current account. India continues to be among the world’s largest recipients of remittances, with inflows contributing significantly to household incomes and foreign exchange reserves.
The merchandise trade deficit widened during the quarter as imports grew faster than exports. Higher purchases of crude oil, electronic goods and industrial inputs increased import costs. However, the strength of services exports and remittances helped offset the impact of the larger goods trade gap.
The current account measures the flow of goods, services, income and transfers between a country and the rest of the world. A surplus indicates that inflows exceed outflows, reflecting a favourable external position.
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