India’s current account deficit moderated to $12.3 billion (1.3% of GDP) in Q2:25-26 from $20.8 billion (2.2% of GDP) in Q2:24-25, the Reserve Bank of India (RBI) said on Monday.

Meanwhile the merchandise trade deficit of $87.4 billion in the second quarter was lower than $88.5 billion in Q2:24-25. Net services receipts increased to $50.9 billion from $44.5 billion a year ago, the apex bank said.

Services exports have risen on a y/y basis in major categories such as computer services and other business services. Net outgo on the primary income account, mainly reflecting payments of investment income, increased to $12.2 billion from $9.2 billion.

Personal transfer receipts under secondary income accounts, mainly representing remittances by Indians employed overseas, rose to $38.2 billion from $34.4 billion.

In the financial account, foreign direct investment recorded a net inflow of $2.9 billion during the period under review as against a net outflow of $2.8 billion in the corresponding period of the previous year.

Foreign portfolio investment recorded a net outflow of $5.7 billion as against a net inflow of $19.9 billion in Q2:24-25. Net inflows under ECBs to India amounted to $1.6 billion in as compared with net inflows of $5.0 billion in the corresponding period a year ago. NRI deposits recorded a net inflow of $2.5 billion as compared with $6.2 billion a year ago. There was a depletion of $10.9 billion to the foreign exchange reserves (on a BoP basis) as against an accretion of $18.6 billion. BoP statistics during H1:25-26, shows that the current account deficit declined to $15.0 billion (0.8% of GDP) from $25.3 billion (1.3% of GDP) in H1:24-25.