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The current account deficit for the current fiscal is likely to come in close to 1.3% of the GDP, India Ratings and Research (Ind-Ra) said today.
CAD narrowed to 1.4% in April-December, from 1.7% in the corresponding period of 2014-15.
"Ind-Ra expects the CAD to come in close to 1.3% of GDP in FY16," the agency said in a statement.
CAD, difference between inflow and outflow of foreign exchange, came in at 1.3% in 2014-15, 1.7% in 2013-14 and a record high of 4.8% of GDP in 2012-13.
For the third quarter of current fiscal, CAD was at $7.1 billion (1.3% of GDP), sequentially lower than $8.7 billion (1.7% of GDP) in second quarter.
It was also lower than $7.7 billion (1.5%of GDP) in third quarter of last fiscal.
"Ind-Ra expects improved performance in FDI to continue as India's economic growth improves gradually in 2016-2017 compared to that in 2015-2016. The focus on Make in India will attract larger and more stable FDIs," it said.
In the October-December quarter of fiscal, forex reserves increased by $4.1 billion mainly because of higher FDI flows under the capital account.
The net receipt under the capital account rose to $10.5 billion in third quarter, from $8.6 billion in second quarter.
