India balance of payments surplus figures surprised markets in the January-March quarter, as strong services earnings, higher remittances and central bank foreign exchange swaps helped improve the country’s external position.
The Reserve Bank of India reported a current account surplus of $7.1 billion, equal to 0.7 per cent of GDP, in the final quarter of fiscal year 2025-26. This marked a sharp turnaround from a $13.2 billion current account deficit in the October-December quarter.
The surplus was still lower than the $13.7 billion surplus recorded in the same quarter a year earlier, but it came as a positive surprise because India usually runs a current account deficit due to its large goods import bill.
India balance of payments surplus helped by services exports
India’s services sector remained the biggest support for the external account. Net services receipts rose to $60.4 billion during the quarter, helped by growth in computer services and business services exports.
Remittances also strengthened, rising to $43.5 billion from $33.9 billion a year earlier. These inflows from overseas Indians helped offset pressure from the merchandise trade deficit, which widened to $83.4 billion.
The data shows how India’s external account is increasingly supported by services exports and remittances, even as the country continues to import large volumes of goods, energy and commodities.
India balance of payments surplus also linked to RBI swaps
The balance of payments position was also supported by foreign exchange swap operations carried out by the RBI. Reuters reported that two tranches of $10 billion dollar-rupee swaps helped boost the overall balance of payments surplus in the quarter.
For the full fiscal year 2025-26, India’s current account deficit stood at $25.2 billion, or 0.6 per cent of GDP. The full-year balance of payments, however, recorded a deficit of $23.6 billion.
This means the quarterly improvement did not fully erase pressure from earlier parts of the fiscal year, when wider goods imports and capital flow volatility weighed on the external account.
Economists warn pressure may return
Despite the positive Jan-March reading, economists remain cautious about India’s external outlook. A wider import bill, energy price risks and continued foreign investment outflows could put pressure on the current account in fiscal year 2026-27.
India is heavily dependent on imported crude oil, making its current account vulnerable to global energy price shocks. Any renewed rise in oil prices could widen the import bill and reduce the benefit from strong services exports.
Still, the latest data gives policymakers some breathing space. A current account surplus in the quarter, supported by services exports and remittances, suggests that India’s external position remains manageable for now.
The surprise India balance of payments surplus also strengthens the view that the country’s services sector and overseas worker inflows remain key buffers against global financial and trade uncertainty.
Published in SouthAsianDesk, June 9, 2026
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