India's current account balance recorded a deficit of US$ 10.5 billion (1.2 per cent of GDP) in Q3:2023-24, lower than US$ 11.4 billion (1.3 per cent of GDP) in Q2:2023-241 and US$ 16.8 billion (2.0 per cent of GDP) a year ago [i.e., Q3:2022-23]. The merchandise trade deficit at US$ 71.6 billion was marginally higher than US$ 71.3 billion during Q3:2022-23. Services exports grew by 5.2 per cent on a y-o-y basis on the back of rising exports of software, business and travel services. Net services receipts increased both sequentially and from a year ago that helped cushion the current account deficit.
Net outgo on the primary income account, primarily reflecting payments of investment income, increased to US$ 13.2 billion from US$ 12.7 billion a year ago. Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 31.4 billion, an increase of 2.1 per cent over their level during the corresponding period a year ago. In the financial account, foreign direct investment recorded a net inflow of US$ 4.2 billion as compared with a net inflow of US$ 2.0 billion in Q3:2022-23. Foreign portfolio investment recorded a net inflow of US$ 12.0 billion, higher than US$ 4.6 billion during Q3:2022-23.
External commercial borrowings to India recorded a net outflow of US$ 2.6 billion in Q3:2023-24 as compared with a net outflow of US$ 2.5 billion a year ago. Non-resident deposits recorded a higher net inflow of US$ 3.9 billion than US$ 2.6 billion a year ago. There was an accretion of foreign exchange reserves (on a BoP basis) to the tune of US$ 6.0 billion in Q3:2023-24 as compared with an accretion of US$ 11.1 billion a year ago.
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