New Delhi: In the first quarter of the current financial year, remittances in the country increased to $33.2 billion, up from $28.6 billion recorded during the same period last year, as reported by Crisil.
The report indicated that service exports from the country also grew to USD 97.4 billion in the first quarter of fiscal 2026, compared to USD 88.5 billion a year earlier.
It noted, "Services exports reached USD 97.4 billion in the first quarter of fiscal 2026, an increase from USD 88.5 billion year-on-year. Similarly, remittances rose to USD 33.2 billion, up from USD 28.6 billion."
Additionally, the report revealed that India's current account deficit (CAD) decreased to USD 2.4 billion, or 0.2 percent of gross domestic product (GDP), in the first quarter of this fiscal year. This figure is significantly lower than the USD 8.6 billion, or 0.9 percent of GDP, recorded in the same quarter of the previous year.
The report also mentioned that during the first quarter, financial flows remained net positive at USD 13.2 billion, exceeding the CAD and contributing to an increase in foreign exchange reserves.
However, these inflows were less than the USD 16.6 billion noted in the same period last year, as both net foreign direct investment (FDI) and net non-resident Indian (NRI) inflows saw a decline.
FDI inflows rose to USD 27.2 billion from USD 23.9 billion, but outflows also increased significantly to USD 22.2 billion from USD 17.7 billion, resulting in a reduced net addition.
Net foreign portfolio investment (FPI) inflows rose to USD 1.6 billion, up from USD 0.9 billion last year.
Within the FPI category, equity inflows became positive at USD 5.4 billion, in contrast to previous outflows of USD 1 billion.
On the other hand, the debt segment experienced net outflows of USD 2.9 billion, a shift from net inflows of USD 1.9 billion recorded a year earlier. The report indicates that the second quarter may witness net equity outflows alongside net debt inflows.
Additionally, net external commercial borrowing (ECB) flows improved to USD 3.7 billion, an increase from USD 1.6 billion, indicating that corporations are continuing to borrow internationally under favorable conditions.
The report further highlighted that despite the initiation of India's rate-easing cycle in February 2025, the transmission to marginal cost of lending rates (MCLR) based loans is still not fully realized.
