India Posts $13.5 Billion Current Account Surplus in Q4 FY25

In a significant turnaround for India’s external sector, the country reported a current account surplus of $13.5 billion—equivalent to 1.3% of GDP—for the fourth quarter of FY25, according to data released by the Reserve Bank of India (RBI). This marks a stark reversal from the $11.3 billion deficit recorded in the previous quarter (Q3 FY25) and represents a notable improvement compared to the $4.6 billion surplus in Q4 FY24.

Why in News?

The RBI released its balance of payments data for Q4 FY25 on June 28, 2025, showing a strong current account performance. This is India’s first current account surplus after several quarters of deficit, highlighting improvements in services exports and remittances. The data comes at a time when policymakers are closely monitoring external vulnerabilities amid global financial uncertainties.

Key Highlights from RBI’s Q4 FY25 Data

Current Account Balance

• Surplus of $13.5 billion (1.3% of GDP) in Q4 FY25
• Compared to $4.6 billion surplus (0.5% of GDP) in Q4 FY24
• Reversal from $11.3 billion deficit (1.1% of GDP) in Q3 FY25

Merchandise Trade Deficit

• $59.5 billion in Q4 FY25
• Higher than Q4 FY24 ($52 billion) but lower than Q3 FY25 ($79.3 billion)

Net Services Receipts

• Rose to $53.3 billion in Q4 FY25 from $42.7 billion in Q4 FY24
• Growth led by computer services and business services

Primary Income Outflows

• Moderated to $11.9 billion in Q4 FY25
• Compared to $14.8 billion in Q4 FY24
• Includes payments on foreign investments in India

Personal Transfers (Remittances)

• Increased to $33.9 billion from $31.3 billion YoY
• A key contributor to current account surplus

Foreign Direct Investment (FDI)

• Net inflow of $0.4 billion in Q4 FY25
• Down from $2.3 billion in Q4 FY24

Static Concepts and Background

• Current Account: Measures the flow of goods, services, primary income, and transfers.
• Surplus: Indicates that a country is earning more from exports and transfers than it is spending on imports and payments.
• Significance: A surplus reduces reliance on external borrowing and strengthens the rupee’s stability.
• RBI’s Role: Publishes Balance of Payments (BoP) data quarterly to track India’s external economic health.