India's current account deficit (CAD) narrowed to 14.3 billion dollars or two per cent of the gross domestic product (GDP) during April to June, data released by the Reserve Bank of India showed.
This compared with 15.8 billion dollars or 2.3 per cent of the GDP in the same period a year ago. However, the CAD was higher than 4.6 billion dollars or 0.7 per cent of GDP in the preceding quarter.
The CAD contracted on a year-on-year basis primarily on account of higher invisible receipts at 31.9 billion dollars as compared with 29.9 billion a year ago.
Net services receipts increased by 7.3 per cent on a year-on-year basis, mainly on the back of a rise in net earnings from travel, financial services and telecommunications, computer and information services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, rose to 19.9 billion dollars, increasing by 6.2 per cent from their level a year ago.
In the financial account, net foreign direct investment was 13.9 billion in Q1 of FY20 as compared with 9.6 billion in Q1 of FY19.
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Foreign portfolio investment recorded net inflow of 4.8 billion dollars in Q1 of FY20 -- as against an outflow of 8.1 billion dollars in Q1 of FY19 -- on account of net purchases in both debt and equity markets.
Net inflow on account of external commercial borrowings to India was 6.3 billion dollars in Q1 of FY20 as against an outflow of 1.5 billion dollars a year ago.
In Q1 of FY20, there was an accretion of 14 billion dollars to the foreign exchange reserves (on balance of payments basis) as against depletion of 11.3 billion dollars in Q1 of FY19, the RBI data showed.
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