India’s overall BoP turns into a deficit in the first two months of FY27

A balance of payments deficit may occur when a country’s imports exceed its exports 
| Photo Credit:
Deepak Verma

India’s total balance of payments slipped into a deficit during the opening two months of FY27, driven mainly by net outflows on the capital account—particularly via foreign portfolio investment (FPI)—while the current account recorded a surplus, according to provisional RBI figures.

During April‑May 2026, the balance of payments—a ledger of all economic dealings between residents and the rest of the world—showed a shortfall of $11 billion, compared with a $5 billion surplus a year earlier.

A balance of payments deficit can occur when imports exceed exports and there are capital outflows, such as through FPI or FDI, among other factors; this can put pressure on the local currency.

The current account—covering goods, services, transfers and income—posted a surplus of $2.8 billion for the period, reversing a $4.1 billion deficit recorded previously.

The capital account—including FDI, FPI, external commercial borrowings, short‑term credit to India, banking capital and other capital flows—recorded a deficit of $13.8 billion, compared with a $9.0 billion surplus a year earlier.

Published on July 15, 2026