According to preliminary data on the India balance of payments August 2026, the country recorded an overall balance surplus of US$ 45.4 billion, reversing a deficit of US$ 5.6 billion reported in August 2025. The monthly current account deficit narrowed to US$ 5.2 billion from US$ 6.1 billion recorded in the same month of the previous year.
Current Account Deficit Narrows to $5.2 Billion
The improvement in the current account was supported by a smaller merchandise trade deficit, which shrank to US$ 26.6 billion in August 2026 from US$ 27.6 billion in August 2025. Merchandise exports rose to US$ 44.7 billion against imports of US$ 71.3 billion. Net services receipts expanded to US$ 16.5 billion during the month, driven by services exports of US$ 35.5 billion and services imports of US$ 18.9 billion.
Net secondary income, or transfers, brought in US$ 12.8 billion compared with US$ 12.2 billion in August 2025. In contrast, the net primary income deficit widened to US$ 8.0 billion from US$ 6.3 billion a year earlier.
Capital Inflows Driven by Banking and FDI
The capital account recorded a net inflow of US$ 50.6 billion in August 2026, up significantly from US$ 0.5 billion in August 2025. Banking capital formed the largest component, generating net inflows of US$ 64.7 billion, of which non-resident Indian (NRI) deposits accounted for US$ 83.0 billion.
Foreign direct investment (FDI) registered net inflows of US$ 3.3 billion, turning around from a net outflow of US$ 0.1 billion in August 2025. Gross FDI in India was US$ 5.2 billion against outward FDI of US$ 1.9 billion. Foreign portfolio investment (FPI) also turned positive, posting net inflows of US$ 1.7 billion compared with net outflows of US$ 2.6 billion in August 2025. Meanwhile, net external commercial borrowings (ECB) stood at negative US$ 22.4 billion, and other capital contributed US$ 3.0 billion. Net short-term credit to India remained unchanged at US$ 0.2 billion.
Cumulative BoP Surplus Hits $58 Billion in April–August
For the cumulative period of April to August 2026, the overall balance stood at a surplus of US$ 58.0 billion, shifting from a deficit of US$ 0.8 billion in April–August 2025. The cumulative current account deficit widened to US$ 18.3 billion from US$ 12.8 billion, weighed down by a merchandise deficit of US$ 146.0 billion.
Cumulative capital inflows reached US$ 76.3 billion during the five-month span, driven by US$ 85.8 billion in net banking capital and US$ 119.2 billion in net NRI deposits. Foreign direct investment totaled US$ 13.8 billion net, while foreign portfolio investment registered a net outflow of US$ 3.7 billion. Under monetary movements, foreign exchange reserves increased by US$ 45.4 billion in August 2026 and by US$ 58.0 billion across April–August 2026.
Q1. What was India's overall balance of payments surplus in August 2026?
India recorded an overall balance of payments surplus of US$ 45.4 billion in August 2026.
Q2. What was India's current account deficit in August 2026?
The current account deficit stood at US$ 5.2 billion in August 2026, narrowing from US$ 6.1 billion in August 2025.
Q3. How much did foreign direct investment and portfolio investment contribute in August 2026?
Net foreign direct investment contributed US$ 3.3 billion, while net foreign portfolio investment contributed US$ 1.7 billion.
Q4. What drove the capital account surge in August 2026?
The capital account was driven primarily by banking capital net inflows of US$ 64.7 billion, which included US$ 83.0 billion in net NRI deposits.
Q5. What was the cumulative balance of payments outcome for April–August 2026?
The cumulative overall balance of payments surplus was US$ 58.0 billion for the April–August 2026 period.
Source: https://www.rbi.org.in/
