The Reserve Bank of India (RBI) reported a current account deficit of US$ 4.2 billion (0.5% of GDP) in Q1:2026-27, up from US$ 3.4 billion (0.4% of GDP) in the same quarter of the previous year. The merchandise trade deficit soared to US$ 86.1 billion, compared to US$ 68.9 billion in Q1:2025-26. However, net services receipts increased to US$ 51.6 billion from US$ 47.9 billion year-on-year, driven by growth in computer services, business services, and transportation. Payments on the primary income account fell to US$ 10.5 billion from US$ 13.3 billion. Remittances grew, with personal transfer receipts rising to US$ 42.9 billion from US$ 33.2 billion. In the financial account, foreign direct investment (FDI) rose to US$ 6.1 billion, while foreign portfolio investment (FPI) saw a net outflow of US$ 9.6 billion. NRI deposits and external commercial borrowings (ECBs) also showed declining net inflows, and foreign exchange reserves decreased by US$ 8.1 billion.