India registered a Net BoP deficit of USD 24.4 bn in Q3 FY26 vis-?-vis a deficit of USD 37.7 bn in Q3 FY25
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India registered a Net BoP deficit of USD 24.4 bn in Q3 FY26 vis-?-vis a deficit of USD 37.7 bn in Q3 FY25. Notwithstanding the pressure from gradually rising commodity prices and an uncertain external trade environment, the current account deficit remained moderate, printing at 1.3% of GDP in Q3 FY26. However, global uncertainties continue to weigh upon the capital account as it slipped into deficit territory. From a trend perspective, India’s BoP continues to be marked by two contrasting structural developments in recent years. The structural upliftment of services trade surplus has been keeping the pressure on current account deficit under check. At the same time, capital flows have been subdued as well as volatile in a globally fragmented world post-COVID, marked by protectionism and heightened geoeconomic and geopolitical uncertainties. We now revise our FY26 current account forecast to -1.1% of GDP (USD -42 bn) from -1.3% (USD 52 bn) earlier. The forecast for BoP deficit now stands adjusted at USD 35 bn from USD -14 bn earlier. Going forward, while we retain our FY27 current account forecast of -1.2% of GDP (USD -50 bn), we finetune our estimate of BoP to USD +5 bn from USD +10 bn earlier. The band of uncertainty surrounding these forecasts has widened post the Iran crisis, even as the trade/tariff situation continue to remain uncertain. Besides, the contours of the India-US trade deal have become unpredictable post the recent US Supreme Court ruling against President Trump’s use of emergency power to impose discriminatory tariffs.