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India’s Current Account Deficit Narrows to 1% of GDP in Q2 FY26.

Economy & Business | Dated: 23 Dec 2025

India’s Current Account Deficit (CAD) narrowed significantly to 1% of GDP in the second quarter (July-September) of FY 2025-26, down from 1.1% in the preceding quarter. The Reserve Bank of India (RBI) data attributes this improvement to a lower merchandise trade deficit and robust growth in services exports.

🎯 Key Highlights:

  • Net services receipts increased, driven by software, business, and travel services.
  • Private transfer receipts, mainly remittances from Indians employed overseas, amounted to $30 billion.
  • The narrowing CAD strengthens the Indian Rupee against global volatility.

💡 Other Important Facts:

  • Indicator: Current Account Deficit (CAD).
  • Value: 1% of GDP.
  • Key Driver: Service Exports & Remittances.

📚 Test Your Knowledge:

What was India's Current Account Deficit (CAD) as a percentage of GDP in Q2 of FY 2025-26?

Correct Answer: 1%

🚀 Quick Recap:

About RBI Data

  • Report – Balance of Payments (BoP)
  • Released by – RBI