A BoP deficit can arise when a country imports more than it exports
| Photo Credit:
Deepak Verma
India’s overall balance of payments (BoP) turned into a deficit in the first two months of FY27 due to net outflows under the capital account head, especially under the foreign portfolio investment (FPI) route, even as the current account turned into a surplus, per provisional RBI data.
In the April-May 2026 period, the BoP, which is a record of all economic transactions between a country’s residents and the rest of the world, turned into a deficit of $11 billion against a surplus of $5 billion in the year ago period.
A BoP deficit can arise when a country imports more than it exports and there are outflows under the FPI/ FDI route, among others. It can weaken the domestic currency.
The current account, comprising merchandise, services, transfers and income, saw a surplus of $2.8 billion during the said period (against a deficit of $4.1 billion).
The capital account, foreign direct investment, FPI, external commercial borrowings, short-term credit to India, banking capital and other capital, saw a deficit of $13.8 billion (against a surplus of $9.0 billion).
Published on July 15, 2026
