Current account gap narrows to 1% of GDP at $8.3 bn in Q2FY24: RBI

India's current account deficit declined sharply to 1 per cent of the GDP or $8.3 billion in the second quarter of this financial year, mainly due to lower merchandise trade deficit and growth in services exports, according to a RBI data released on Tuesday.

The current account deficit (CAD) was 3.8 per cent of GDP or $30.9 billion in July-September quarter in 2022-23.

CAD was $9.2 billion or 1.1 per cent of GDP in the first quarter (April-June) of the current financial year 2023-24.

"Underlying the lower current account deficit on a year-on-year (y-o-y) basis in Q2:2023-24 was the narrowing of merchandise trade deficit to $61.0 billion from $78.3 billion in Q2:2022-23," said the data on Developments in India's Balance of Payments during the second quarter (July-September) of 2023-24.

Services exports grew by 4.2 per cent on a y-o-y basis on the back of rising exports of software, business and travel services, the Reserve Bank said.

Net services receipts increased both sequentially and on a y-o-y basis, it added.