Surplus Surprise! India’s Current Account Bounces Back in Q4 FY25

Image Source: Sweet Crude Reports

India’s current account balance is back in the black for the first time in a year, thanks to a mix of lower trade deficits, strong service exports, and a steady stream of remittances from Indians working abroad.

Here’s a quick breakdown of what’s behind the numbers:

In the fourth quarter of FY25, India posted a current account surplus of about $7 billion, which is roughly 0.7% of GDP. That’s a big turnaround after three straight quarters of deficits.
The main reason for the surplus? The trade deficit shrank to its lowest level in more than two years, helped by steady exports and a dip in imports.
Services exports—think IT, business outsourcing, and consulting—remained strong, bringing in over $42 billion. At the same time, remittances from Indians overseas jumped by nearly 12%, hitting $32 billion for the quarter.

Even with this positive quarter, the full year’s current account is still likely to show a small deficit, but it’s expected to stay in a comfortable range (around 1% of GDP).

Economists say this is good news for the rupee, which should stay fairly stable against the dollar for now.

Looking ahead, experts think the surplus might be short-lived. If imports pick up or oil prices rise, India could slip back into a modest deficit next year.

Bottom line: India’s latest numbers show the economy’s got some resilience, especially when it comes to services and remittances—even as global markets keep everyone guessing.

Source: Moneycontrol, The Hindu BusinessLine, Business Standard, Trading Economics, BusinessWorld