Current account deficit more than doubles to $7b in July

India’s current account deficit widened to $7 billion in July from $3.2 billion a year ago, mainly due to a higher merchandise trade deficit, according to the Reserve Bank data released on Tuesday.

The preliminary data on India’s balance of payments (BoP) for July 2026 released by the central bank showed that the merchandise trade deficit rose to $31.7 billion in July from $28.2 billion in the same month last year.

Imports increased to $76.8 billion from $65.6 billion, while exports rose to $45.1 billion from $37.4 billion.

On the other hand, there was improvement in net services surplus, which increased to $17.6 billion in July from $16.4 billion in the year-ago month. Services exports stood at $38.3 billion while imports totalled $20.6 billion during the month under review.

Net transfers increased to $13.2 billion in July 2026 from $12.6 billion, while net income outgo widened to $6.1 billion from $4 billion.

The capital account recorded a net inflow of $27.7 billion in July 2026, sharply higher than $3.5 billion in the year-ago month. According to the data, net foreign direct investment inflows rose to $7.3 billion in July from $4.5 billion a year earlier. Net foreign portfolio investment recorded an inflow of $4.1 billion against an outflow of $2.5 billion in July 2025.

The overall balance stood at a surplus of $20.8 billion in July 2026, compared with $0.3 billion in the year-ago month.

For the April-July period of 2026-27, the current account deficit stood at $11.2 billion, compared with $6.6 billion in the corresponding period of 2025-26.

The capital account recorded a net inflow of $23.9 billion during April-July 2026, against $11.4 billion a year earlier.

The overall balance was a surplus of $12.7 billion, up from $4.8 billion a year earlier.