Current account deficit widens to $11.5 billion in Q3

Mumbai: India’s current account deficit (CAD) slightly widened to $11.5 billion, or 1.1% of GDP, in Q3 FY2025 from $10.4 billion (1.1% of GDP) a year earlier. However, it moderated from $16.7 billion, or 1.8% of GDP, in Q2 FY2025. The merchandise trade deficit rose to $79.2 billion in Q3 FY2025 from $71.6 billion in the same quarter last year.
According to Aditi Nayar, chief economist at ICRA, the deficit was lower than expected. “This amounted to 1.1% of GDP, similar to last year’s levels, also below the 1.8% recorded in Q2 FY2025 and ICRA’s estimate of 1.4% for that quarter.” She added that ICRA expects a current account surplus of around $4-6 billion in Q4 FY2025, supported by a seasonal rise in merchandise exports and a healthy services surplus.
Net services receipts increased to $51.2 billion from $45 billion a year ago, with growth across major categories such as business services and computer services.