Heavy selling by foreign funds results in BOP deficit
MUMBAI: India’s balance of payments swung from a surplus of $0.5 billion in April 2025 to a deficit of $ 6.6 billion in April 2026, even as the current account moved into surplus during the period. The current account recorded a surplus of $4.7 billion in April 2026 compared with a deficit of $4.8 billion a year earlier, driven by strong inflows in invisibles.Net transfers (comprising largely of worker remittances) led the improvement, rising by $6.6 billion to $16 billion from $9.4 billion, reflecting higher remittance inflows in the wake of the West Asia conflict and rupee depreciation.
CAD surplus of $4.7 billion in April
The services surplus also increased by $2.7 billion to $18.6 billion, supported by a rise in exports from $32.8 billion to $37 billion. The primary income deficit narrowed by $1.1 billion to $1.9 billion.These gains helped offset a wider merchandise trade deficit, which increased to $27.9 billion from $27.1 billion. However, the overall balance turned negative due to a sharp deterioration in the capital account, which shifted to a deficit of $11.3 billion from a surplus of $5.3 billion in April 2025.FPI outflows widened significantly to $8.7 billion from $2.1 billion, indicating heavy selling by overseas investors. Banking capital reversed to an outflow of $3.7 billion from an inflow of $3.3 billion.
