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India’s Current Account Deficit (CAD) Rises

Kumari Sonali

India’s Current Account Deficit (CAD) Rises:

India’s current account deficit (CAD) widened to $11.5 billion (1.1% of GDP) in Q3 FY25 (Oct-Dec 2024) due to a higher merchandise trade deficit, according to the Reserve Bank of India (RBI). However, CAD moderated from $16.7 billion (1.8% of GDP) in Q2 FY25. Foreign exchange reserves have increased by $311 billion since December 2018, marking the largest jump under any RBI Governor. The balance of payments (BoP) saw a depletion of $37.7 billion, contrasting with an accretion of $6 billion in Q3 FY24. The full-year CAD for FY25 is expected to be around 0.8% of GDP.

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