Document title: Developments in India's Balance of Payments for the Month of August 2026

Issuing authority: Reserve Bank of India, Department of Communication

Date: October 15, 2026

Macro Outlook

The preliminary balance of payments for August 2026 shows an overall surplus of US$45.4 billion, a sharp reversal from the US$5.6 billion deficit recorded in August 2025. The current account, which reflects trade in goods and services, transfers and income, posted a net deficit of US$5.2 billion, an improvement over the US$6.1 billion deficit in the same month a year earlier.

External Sector and Currency

Merchandise trade continued to run a deficit, widening to US$26.6 billion in August 2026 from US$27.6 billion in August 2025. Export earnings rose to US$44.7 billion, while import outlays increased to US$71.3 billion. Services showed a net surplus of US$16.5 billion, up from US$15.6 billion a year earlier, driven by export services of US$35.5 billion against import services of US$18.9 billion. Transfers recorded a net inflow of US$12.8 billion, and income remained negative at US$8.0 billion.

Capital Markets and Flows

The capital account turned strongly positive, registering a net inflow of US$50.6 billion in August 2026 compared with a modest US$0.5 billion in August 2025. Foreign direct investment (FDI) contributed a net inflow of US$3.3 billion, with US$2.0 billion invested in India and US$1.9 billion repatriated abroad. Foreign portfolio investment (FPI) moved into a net inflow of US$1.7 billion after a net outflow of US$2.6 billion a year earlier. External commercial borrowings (ECBs) recorded a net outflow of US$22.4 billion, reversing a modest inflow of US$0.1 billion in the prior year. Short‑term credit to India remained stable at US$0.2 billion. Banking capital saw a dramatic increase, with a net inflow of US$64.7 billion, of which NRI deposits alone contributed US$83.0 billion. Other capital items posted a net inflow of US$3.0 billion.

Overall, the BoP data indicate a substantial improvement in external balances, driven primarily by strong capital inflows, especially in banking capital, while the current account deficit narrowed modestly despite a widening merchandise trade gap. This reflects heightened foreign investor confidence and robust deposit inflows, offset by persistent trade imbalances.