Economic Survey highlights strong external sector with record remittances and forex reserves
New Delhi: The Economic Survey 2025–26 said India’s external sector remained strong as remittance inflows reached a record USD 135.4 billion in FY 25 and foreign exchange reserves rose to USD 701.4 billion by January 16, 2026.
Union Finance and Corporate Affairs Minister Nirmala Sitharaman tabled the survey in Parliament. The document said India deepened global integration through robust exports, resilient services trade and wider trade networks. These trends reflected higher competitiveness and better adaptation to global demand.
On the current account, the survey said strong services exports and private transfers offset the merchandise trade deficit. As a result, the Current Account Deficit narrowed to USD 15 billion, or 0.8 per cent of GDP, in the first half of FY 26. This marked a clear improvement from USD 25.3 billion, or 1.3 per cent of GDP, in H1 FY 25.
The survey said India stood in a stronger position than high-deficit economies such as New Zealand, Brazil, Australia, the UK and Canada in Q2 FY 26. It added that remittances played a central role in external stability. The share of remittances from advanced economies increased due to rising participation of skilled professionals.
Economic Survey details strength of India external sector
On the capital account, the survey said India attracted gross investment inflows worth 18.5 per cent of GDP in FY 25 despite tight global financial conditions. Citing UNCTAD data, it said India remained the largest recipient of gross FDI inflows in South Asia. The country also surpassed Asian peers such as Indonesia and Vietnam.
India ranked fourth globally in greenfield investment announcements in 2024 with more than 1,000 projects. Between 2020 and 2024, it emerged as the largest destination for greenfield digital investments, attracting USD 114 billion. Gross FDI inflows rose to USD 64.7 billion during April–November 2025, up from USD 55.8 billion a year earlier.
The survey noted volatility in foreign portfolio investment flows. However, it said quick inflow reversals showed that foreign investors retained a positive medium-term view on India.
India’s foreign exchange reserves increased to USD 701.4 billion by January 16, 2026, from USD 668 billion at the end of March 2025. The reserves covered around 11 months of imports and about 94 per cent of external debt.
India’s external debt stood at USD 746 billion at end-September 2025. The external debt-to-GDP ratio remained moderate at 19.2 per cent. External debt formed less than 5 per cent of total public debt, which limited external sector risks.
