India’s Current Account Gap Expands to $4.2 Billion in First Quarter
Higher merchandise trade deficit pushes the April-June shortfall to 0.5% of GDP, highlighting pressure on India’s external balance.
NEW DELHI, Sep 2: India’s current account deficit (CAD) widened to $4.2 billion in the first quarter of 2026-27, reflecting a larger merchandise trade gap during the April-June period.
According to data released by the Reserve Bank of India, the deficit stood at $3.4 billion in the corresponding quarter a year earlier. As a share of the economy, the latest shortfall was equivalent to 0.5 per cent of GDP.
The increase points to greater pressure from the country’s external trade position as imports continued to outpace merchandise exports.
The current account captures India’s transactions with the rest of the world involving goods and services, primary income and secondary income. A deficit generally indicates that the country’s payments to the rest of the world exceeded its current receipts during the period.
The latest figures come amid heightened volatility in global trade and commodity markets, which could influence India’s import bill and external financing requirements.
Despite the widening deficit, India’s strong foreign exchange reserve position provides an important buffer against external shocks.
The Reserve Bank has also been closely monitoring developments in currency and financial markets as global conditions remain uncertain.
