India’s current account deficit (CAD) narrowed sharply to $12.3 billion in Q2FY26, driven by a lower merchandise trade gap and strong remittances. However, a surge in gold imports in October could push the Q3 deficit above 2.5% of GDP.

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• CAD at $12.3 bn or 1.3% of GDP in Q2FY26
• Down from $20.8 bn (2.2%) in Q2FY25
• Sequential rise from $2.4 bn in Q1FY26
• Trade deficit narrowed to $87.4 bn YoY
• Remittances jumped to $38.2 bn from $34.4 bn
• Primary income outgo increased to $12.2 bn
• Forex reserves saw $10.9 bn depletion in Q2
• Gold import spike may lift Q3 CAD above 2.5%
• FY26 CAD expected at 1.1–1.2% of GDP
• H1FY26 deficit fell to $15 bn vs $25.3 bn last year