The current account deficit (CAD) narrowed by more than a percentage point to 0.6 per cent of GDP at USD 3.4 billion in the July-September on account of lower trade deficit. The July-September CAD is lower than USD 8.5 billion, or 1.7 per cent of GDP, in the same quarter of last fiscal. It is, however, higher than USD 0.3 billion or 0.1 per cent recorded in the first quarter of the current fiscal.
According to RBI data, private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to USD 15.2 billion, registering a decline by 10.7 per cent from the previous level a year ago. “The contraction in the CAD on year-on-year basis was primarily on account of lower trade deficit (USD 25.6 billion) brought about by a larger decline in merchandise imports relative to exports,” the RBI said in a statement.
Net services receipts moderated on annual basis, primarily owing to the fall in earnings from software, financial services and charges for intellectual property rights, it said.
“In the financial account, net inflows of both foreign direct investment and portfolio investment were significantly higher in the second quarter,” it said. Non-resident Indian (NRI) deposits also witnessed a 50 per cent decline to USD 2.1 billion from USD 4.2 billion in the same quarter of the previous fiscal.
During the first 6 months of the current fiscal, the current account deficit (CAD) narrowed to 0.3 per cent of GDP from 1.5 per cent in the same period a year ago on contraction in the trade deficit. India’s trade deficit narrowed to USD 49.5 billion in the first half from USD 71.6 billion in the same period previous fiscal.