India’s current account deficit narrowed in the July-September quarter largely due to a lower merchandise trade deficit while services exports also grew, the Reserve Bank of India said on Tuesday.
The current account deficit stood at $8.3 billion, or 1% of GDP, in the second quarter of fiscal 2023-24 as compared to $9.2 billion or 1.1% of GDP in the preceding quarter. The CAD stood at $30.9 billion or 3.8% in the same quarter a year ago.
“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 USD 61.0 billion from USD 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.
Net invisible receipts were higher in H1 2023-24 on a y-o-y basis primarily on account of higher net services receipts.
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. Net services receipts increased both sequentially and on a y-o-y basis.
Net outgo on the primary income account, primarily reflecting payments of investment income, increased to $ 12.2 billion from $ 11.8 billion a year ago, said RBI.
External commercial borrowings to India recorded a net outflow of $ 1.8 billion in Q2 of 2023-24 as compared with a net outflow of $ 0.5 billion in Q2 of the previous year.
India’s CAD had narrowed in the January-March quarter of the previous financial year, the lowest in seven quarters.
