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India's overall balance of payments (BoP) recorded a surplus of USD 45.4 billion in August 2026, compared with a deficit of USD 5.6 billion in the same month last year, supported by a sharp rise in foreign currency inflows, particularly non-resident Indian (NRI) deposits, according to data released by the Reserve Bank of India (RBI) on Thursday.
The sharp improvement comes even as India's current account remained in deficit, highlighting the role of foreign capital inflows in strengthening the country's external financial position. According to the data, the overall BoP surplus rose from USD 20.8 billion in July 2026 to USD 45.4 billion in August. A major contributor was the sharp increase in banking capital inflows, which reached USD 64.7 billion in August, compared with an outflow of USD 4.7 billion in August 2025. Within this category, net NRI deposits rose sharply to USD 83 billion during August, against USD 1 billion in the corresponding month last year. The increase in foreign currency inflows follows measures introduced by the RBI earlier this year to attract overseas funds and strengthen the country's external position. Meanwhile, India's current account deficit narrowed to USD 5.2 billion in August from USD 6.1 billion a year earlier, despite continued pressure from merchandise trade. The merchandise trade deficit stood at USD 26.6 billion during the month, compared with USD 27.6 billion in August 2025. Services trade continued to provide support, with the services surplus rising to USD 16.5 billion from USD 15.6 billion a year earlier. Foreign direct investment also improved, with net inflows of USD 3.3 billion in August, compared with a net outflow of USD 0.1 billion in the same month last year. Foreign portfolio investment registered net inflows of USD 1.7 billion, against net outflows of USD 2.6 billion a year earlier. However, the April-August figures showed continued pressure on the current account. The cumulative current account deficit widened to USD 18.3 billion from USD 12.8 billion in the corresponding period last year. Despite this, India's overall balance of payments recorded a cumulative surplus of USD 58 billion during April-August 2026, compared with a deficit of USD 0.8 billion a year earlier. The data indicate that strong capital inflows helped India maintain an overall external surplus despite continued trade-related pressures. (ANI)
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