Key Takeaways
- India’s balance of payments showed a surplus of $45.4 billion in August.
- The surplus was a significant improvement from a deficit of $5.6 billion in the same month last year.
- Foreign portfolio investments contributed $50.6 billion to the capital account in August.
India’s balance of payments recorded a surplus of $45.4 billion in August, marking a significant improvement from a deficit of $5.6 billion in the same month last year, according to data from the Reserve Bank of India.
The current account balance for August stood at a deficit of $5.2 billion, compared with a deficit of $6.1 billion in August 2025, indicating a slight improvement in the trade balance.
Net transfers, which include remittances from Indian workers overseas, rose to $12.8 billion in August from $12.2 billion a year earlier, reflecting an increase in the inflow of foreign currency.
The capital account, which includes foreign portfolio investments, recorded inflows of $50.6 billion in August, compared with inflows of $0.5 billion a year earlier, highlighting a substantial increase in foreign capital inflows.
As of September 18, the Indian central bank’s capital inflow measures had drawn over $143 billion, with $133 billion coming from overseas foreign-exchange deposits, underscoring the effectiveness of the central bank’s policies.
Despite the improvement, concerns over India’s balance of payments deficit have been a pain point for the rupee in 2026, as the Iran war lifted crude oil prices sharply and caused persistent capital outflows.
The Reserve Bank of India’s Chief stated that bank liquidity surplus is likely to decline by the financial year-end, suggesting a potential shift in the economic landscape.
