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

India's current account deficit widened to $7 billion in July 2026 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 current account deficit for April-July 2026 stood at $11.2 billion, up from $6.6 billion in the corresponding period of the previous year, the data showed.

The merchandise trade deficit increased to $31.7 billion in July from $28.2 billion a year ago.

Merchandise exports rose to $45.1 billion from $37.4 billion, while imports increased at a faster pace to $76.8 billion from $65.6 billion.

The widening merchandise trade gap was partly offset by a higher net surplus in services, which increased to $17.6 billion in July from $16.4 billion a year ago.

Services exports rose to $38.3 billion from $33.7 billion, while imports increased to $20.6 billion from $17.3 billion.

Net transfers, which include remittances, increased to $13.2 billion in July from $12.6 billion a year ago and stood at $53.9 billion in April-July, compared with $43.4 billion in the year-ago period.

Net income outgo, however, increased to $6.1 billion in July from $4 billion a year ago. \

On the capital account, net inflows rose sharply to $27.7 billion in July from $3.5 billion a year ago.

Net foreign direct investment (FDI) increased to $7.3 billion in July from $4.5 billion.

FDI inflows into India rose to $10.7 billion from $7.2 billion, while outward FDI increased to $3.4 billion from $2.7 billion.

Foreign portfolio investment (FPI) recorded a net inflow of $4.1 billion in July, compared with an outflow of $2.5 billion a year ago.

Banking capital recorded net inflows of $18.4 billion in July, compared with $6 billion a year earlier.

Non-resident Indian (NRI) deposits accounted for $33.5 billion of the inflows in July, against $1 billion in the year-ago month.

External commercial borrowings recorded a net outflow of $2.3 billion in July, against a net inflow of $1.4 billion a year ago.

The overall balance showed a surplus of $20.8 billion in July, compared with $0.3 billion in July 2025.

For the April-July period, the overall balance stood at a surplus of $12.7 billion, against $4.8 billion in the year-ago period.