India's services trade surplus supports current account stability

India's service trade surplus and strong remittances are expected to help maintain a stable current account balance, according to a new report by Crisil. The current account deficit is projected to be 1% of GDP in fiscal 2025 and 1.3% in fiscal 2026. In January, the service trade surplus was $18 billion, up from $16.2 billion a year earlier but down from $19.1 billion in December. Service exports for the period from April to February this financial year reached $354.90 billion, showing a 12% increase compared to the same time last year. Service imports also grew, rising 12.6% in January. The cumulative exports of both goods and services increased by 6.24% to $750.53 billion in the same period, compared to $706.43 billion last year. Merchandise exports remained stable at $395.63 billion, showing a slight increase of 0.06% from the previous year. Service imports for the same period totaled $183.21 billion, up from $161.71 billion last year. The overall services trade surplus for April-February was $171.69 billion, compared to $149.34 billion last year. In addition, India's foreign exchange reserves saw their biggest weekly increase in over three years, rising by $15.267 billion to reach $653.966 billion as of March 7.