India’s balance of payments (BoP) data for May 2026 shows a current account deficit of US$ 2.0 billion. This marks a sharp reversal from the US$ 0.7 billion surplus recorded in May 2025. However, the April–May 2026 period tells a more positive story, with a combined current account surplus of US$ 2.8 billion.
Key Details of India’s Balance of Payments – May 2026
The merchandise trade deficit widened significantly in May 2026, reaching US$ 27.9 billion compared to US$ 22.6 billion a year ago. Merchandise exports, however, grew strongly to US$ 46.1 billion from US$ 38.7 billion. Meanwhile, imports also surged to US$ 74.0 billion, putting pressure on the trade balance.
Services exports rose modestly to US$ 33.4 billion, up from US$ 32.5 billion in May 2025. Additionally, net transfers jumped to US$ 13.6 billion from US$ 10.5 billion, partly cushioning the impact of the wider trade deficit. Net income outflows, however, increased slightly to US$ 3.4 billion.
On the capital account side, India recorded a net outflow of US$ 2.4 billion in May 2026, compared to an inflow of US$ 3.7 billion in May 2025. Foreign Portfolio Investment (FPI) saw a net outflow of US$ 4.7 billion, reflecting global investor caution. As a result, the overall balance swung to a deficit of US$ 4.4 billion from a surplus of US$ 4.4 billion a year earlier.
What the India BoP Data Means for the Economy
The widening current account deficit in May 2026 signals rising import demand alongside strong export growth. Foreign Direct Investment remained relatively stable, with net inflows into India at US$ 2.4 billion. However, the sharp FPI outflows and negative overall balance highlight external sector pressures.
For the April–May 2026 period, merchandise exports reached US$ 90.7 billion, while imports climbed to US$ 146.5 billion. Net transfers for the same period surged to US$ 29.6 billion, more than double the year-ago figure of US$ 20.0 billion. Therefore, remittance inflows appear to be playing a growing role in supporting India’s external balance.
The RBI released these figures as preliminary data, and they are subject to revision in subsequent releases. The monetary movements figure of US$ 4.4 billion reflects a decrease in foreign exchange reserves during the month.
Source: RBI Press Releases
