India recorded a current account deficit (CAD) of $2 billion in May 2026, compared with a surplus of $0.7 billion in the year-ago period, as merchandise imports exceeded export growth, according to preliminary balance of payments data released by the Reserve Bank of India (RBI) on Wednesday.

The country's merchandise trade deficit widened to $27.9 billion in May 2026 from $22.6 billion a year earlier. Merchandise exports rose to $46.1 billion from $38.7 billion, while imports surged to $74 billion from $61.3 billion during the period.

In May 2026, the merchandise trade deficit widened to $27.9 billion from $22.6 billion a year ago. Merchandise exports rose to $46.1 billion from $38.7 billion, while imports spiked to $74 billion from $61.3 billion during this period.

Net services exports were broadly stable at $15.7 billion, compared with $15.8 billion a year ago.  Services exports stood at $33.4 billion, while services imports rose to $17.6 billion.

Net transfers, supported by remittances, rose to $13.6 billion in May from $10.5 billion a year earlier. Net income outflows stood at $3.4 billion.

For the April-May period of FY27, India's current account surplus stood at $2.8 billion, compared with a deficit of $4.1 billion in the corresponding period last year. This was mainly due to higher inward remittances and a rise in service exports.

On the capital account, there was a net outflow of $2.4 billion in May 2026 compared with net inflows of $3.7 billion a year ago.

Foreign portfolio investment (FPI) saw a net outflow of $4.7 billion in May, compared with inflows of $1.3 billion a year earlier. Net foreign direct investment (FDI) was marginally negative at $0.1 billion, compared with an inflow of $0.9 billion in May last year.

Net FDI inflows into India was at $2.4 billion in May, while overseas investments by Indian entities stood same at $2.4 billion.

External commercial borrowings (ECBs) recorded a modest net inflow of $0.1 billion versus $2.4 billion a year ago. Short-term credit to India registered a net inflow of $3.2 billion.

Banking capital showed a net outflow of $1.1 billion, including net non-resident Indian (NRI) deposit inflows of $0.6 billion.

India's overall balance of payments (BoP) was in deficit of $4.4 billion in May, compared with a surplus of $4.4 billion in the same month last year. 

The BoP deficit, however, narrowed from $6.6 billion in April. The deficit stood at $11 billion during the first two months of FY27, compared with a surplus of $5 billion in the same period last year.