India posts current account surplus of $13.5 billion in Q4 FY25: RBI data

India posted a current account surplus of $13.5 billion or 1.3% of GDP in the March quarter of 2024-25 as compared with $4.6 billion in the year-ago period mainly on account of a surge in services exports and higher remittances, according to RBI data released on Friday.

However, on an annual basis, the current account was in deficit at $23.3 billion (0.6% of GDP) during 2024-25, said the 'India’s Balance of Payments during the Fourth Quarter (January-March) of 2024-25' released by the Reserve Bank of India.

"India’s current account balance recorded a surplus of $13.5 billion (1.3% of GDP) in Q4 2024-25 as compared with $4.6 billion (0.5% of GDP) in Q4 2023-24 and against a deficit of $11.3 billion (1.1% of GDP) in Q3 2024-25," RBI said.

Balance of Payments is an indicator of the country's external payment scenario.

Merchandise trade deficit at $59.5 billion in Q4 2024-25 was higher than $52 billion in Q4 2023-24. However, it moderated from $79.3 billion in Q3 2024-25.

"Net services receipts increased to $53.3 billion in Q4 2024-25 from $42.7 billion a year ago. Services exports have risen on a y-o-y basis in major categories such as business services and computer services," RBI said.

Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to $33.9 billion in Q4 2024-25 from $31.3 billion in Q4 2023-24.

It further said the net outgo on the primary income account, primarily reflecting payments of investment income, moderated to $11.9 billion in Q4 2024-25 from $14.8 billion in Q4 2023-24.

In the financial account, foreign direct investment (FDI) recorded a net inflow of $400 million in Q4 2024-25 as compared to an inflow of $2.3 billion in the corresponding period of 2023-24.

Foreign portfolio investment (FPI) recorded a net outflow of $5.9 billion in Q4 2024-25 as against a net inflow of $11.4 billion in Q4 2023-24.

There was an accretion of $8.8 billion to the foreign exchange reserves (on a BoP basis) in Q4 2024-25 as compared to an accretion of $30.8 billion in Q4 2023-24.

On Balance of Payments (BoP) during 2024-25, RBI said India’s current account deficit at $23.3 billion (0.6% of GDP) during 2024-25 was lower than $26 billion (0.7% of GDP) during 2023-24, primarily due to higher net invisibles receipts.

Net inflow under FDI at $1 billion during 2024-25 was lower than $10.2 billion during 2023-24.

During 2024-25, FPI recorded a net inflow of $3.6 billion, lower than $44.1 billion a year ago.

Commenting on the data, Aditi Nayar, Chief Economist, ICRA said while the current account balance expectedly reported a seasonal surplus in Q4 FY2025, the size of the same overshot expectations, amid a surprise dip in primary income outflows in the quarter.

Amid expectations of a widening in the merchandise trade deficit as well as a moderation in the services trade surplus in Q1 FY2026 vis-a-vis Q4 FY2025, "we expect the current account to revert to a deficit in the ongoing quarter," she said.