New Delhi [India], September 15 (ANI): India's current account deficit widened to USD 7 billion in July 2026 from USD 3.2 billion a year ago, primarily due to a higher merchandise trade deficit, according to preliminary data released by the Reserve Bank of India on Tuesday.

The current account deficit, which reflects the gap between foreign exchange earned and spent on trade, services, income and transfers, stood at USD 11.2 billion during April-July 2026, compared with USD 6.6 billion in the corresponding period of 2025.

The merchandise trade deficit widened to USD 31.7 billion in July from USD 28.2 billion a year earlier. Merchandise exports rose to USD 45.1 billion from USD 37.4 billion, but imports increased at a faster pace to USD 76.8 billion from USD 65.6 billion.

For April-July, merchandise exports increased to USD 177.1 billion from USD 150 billion, while imports rose to USD 294.9 billion from USD 247.1 billion, taking the merchandise trade deficit to USD 117.8 billion from USD 97.1 billion.

The rise in the current account deficit was partly offset by a stronger surplus in services. Net services receipts increased to USD 17.6 billion in July from USD 16.4 billion a year earlier, with services exports rising to USD 38.3 billion from USD 33.7 billion.

Net transfers also increased to USD 13.2 billion in July from USD 12.6 billion, while net income outflows widened to USD 6.1 billion from USD 4 billion.

Meanwhile, the capital account recorded a net inflow of USD 27.7 billion in July, sharply higher than USD 3.5 billion a year earlier. Net foreign direct investment rose to USD 7.3 billion from USD 4.5 billion.

Net foreign portfolio investment also turned positive at USD 4.1 billion in July, compared with an outflow of USD 2.5 billion a year earlier.

Banking capital recorded a net inflow of USD 18.4 billion, up from USD 6 billion, while net NRI deposits surged to USD 33.5 billion from USD 1 billion. (ANI)