India’s current account deficit (CAD) moderated marginally to $11.2 billion or 1.2 per cent of GDP year-on-year in the July-September quarter of 2024-25, according to Reserve Bank data released on Friday.

The CAD, an indicator of the country’s external payment scenario, was $11.3 billion or 1.3 per cent of GDP during the second quarter of 2023-24.

Merchandise trade deficit increased to $75.3 billion in the second quarter of 2024-25 from $64.5 billion in the comparable period of 2023-24, as per the RBI’s data on Balance of Payments.

Net services receipts increased to $44.5 billion in Q2 2024-25 from $39.9 billion a year ago.

Services exports have risen, on a year-on-year basis, across major categories such as computer services, business services, travel services and transportation services.

Further, private transfer receipts, mainly representing remittances by Indians employed overseas, rose to $31.9 billion in the July-September quarter in 2024-25 from $28.1 billion in the second quarter of 2023-24, the data showed.

In the financial account, the RBI said net foreign direct investment recorded an outflow of $2.2 billion in Q2 2024-25 compared with $0.8 billion outflow in the corresponding period of 2023-24.

Net inflows under foreign portfolio investment increased to $19.9 billion in Q2 2024-25 from $4.9 billion a year ago.

Meanwhile, India’s growing capabilities in high-value sectors such as machinery and electronics are supporting the country’s exports, amid global uncertainties caused by conflicts. The gradual economic recovery in developed markets offers improved growth prospects for the Indian exporting community in 2025.

Trade experts suggest that if the new US administration imposes higher tariffs on China, Mexico, and Canada, Indian exporters could benefit further by seizing those opportunities.