Balance of Payments August 2026: CAD narrows to US$5.2 billion
Why in the news
On 15 October 2026 the Reserve Bank of India issued its monthly data on India’s Balance of Payments (BoP) for August 2026 (press release 2026-2027/1335). The figures for August 2026 are preliminary.
Key facts
- Current account deficit (CAD): US$5.2 billion, lower than US$6.1 billion in August 2025.
- Merchandise trade deficit: US$26.6 billion. Goods exports were US$44.7 billion and imports US$71.3 billion.
- Net services: surplus of US$16.5 billion. Net transfers: US$12.8 billion. Net primary income: outflow of US$8.0 billion.
- Capital account: net inflow of US$50.6 billion, compared with US$0.5 billion a year earlier.
- NRI deposits: net inflow of US$83.0 billion, which took net banking capital to US$64.7 billion.
- External commercial borrowings (ECB): net outflow of US$22.4 billion, mainly from lending by India (US$23.9 billion).
- Overall balance: surplus of US$45.4 billion, so reserves rose (monetary movements of -45.4, where a minus sign means an increase).
| Item (US$ billion, net) | Aug 2025 | Aug 2026 | Apr-Aug 2026 |
|---|---|---|---|
| Current account | -6.1 | -5.2 | -18.3 |
| Merchandise | -27.6 | -26.6 | -146.0 |
| Services | 15.6 | 16.5 | 85.8 |
| Capital account | 0.5 | 50.6 | 76.3 |
| FDI | -0.1 | 3.3 | 13.8 |
| FPI | -2.6 | 1.7 | -3.7 |
| Overall balance | -5.6 | 45.4 | 58.0 |
About Balance of Payments
The BoP records all of a country’s economic transactions with the rest of the world. Its current account covers trade in goods and services, primary income and transfers. Its capital account (as presented in this release) covers FDI, FPI, external borrowings, short-term trade credit, banking capital and other capital. In this release, errors and omissions are counted under other capital.
Exam angle
- The services surplus and remittances offset most of the large goods trade gap.
- NRI deposits (US$83.0 billion) were the biggest single source of the capital inflow in August 2026.
- Net FDI was US$3.3 billion and net FPI US$1.7 billion in August 2026.
- Remember the sign rule: a negative monetary movement means foreign exchange reserves went up.