New Delhi, Dec. 1 -- India's current account deficit narrowed sharply to USD 12.3 billion, or 1.3% of GDP, in the second quarter of FY 2025-26, from USD 20.8 billion (2.2% of GDP) in the same quarter a year earlier, according to preliminary balance of payments (BoP) data released by the Reserve Bank of India on Monday.

The merchandise trade deficit moderated to US$ 87.4 billion in Q2, marginally lower than USD 88.5 billion in the corresponding period last year. Exports and imports both grew, but the increase in exports helped contain the deficit.

India's foreign exchange reserves, on a BoP basis, saw a depletion of USD 10.9 billion in Q2, in contrast to an increase of USD 18.6 billion in the same quarter a year earlier, RBI data said. ...