India’s current account deficit dips to $10.5 billion in October-December: RBI
India’s current account deficit declined to USD 10.5 billion or 1.2 per cent of the GDP in October-December quarter from USD 11.4 billion in the previous three months and USD 16.8 billion a year back, the Reserve Bank of India (RBI) said on Tuesday.
Net FDI inflow at USD 8.5 billion during April-December 2023 was lower than USD 21.6 billion during April-December 2022, it said. Also, accretion of foreign exchange reserves (on a BoP basis) was at USD 6.0 billion in October-December (third quarter of current financial year that ends on March 31) compared to an accretion of USD 11.1 billion a year ago.
The merchandise trade deficit at USD 71.6 billion was marginally higher than USD 71.3 billion during the third quarter of 2022-23. Services exports grew by 5.2 per cent on a year-on-year 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.
In the financial account, foreign direct investment recorded a net inflow of USD 4.2 billion, more than double of net inflow of USD 2.0 billion in Q3 of 2022-23. Foreign portfolio investment recorded a net inflow of USD 12.0 billion in the quarter, higher than USD 4.6 billion a year back.
External commercial borrowings to India recorded a net outflow of USD 2.6 billion in October-December as compared to a net outflow of USD 2.5 billion a year ago.
Non-resident deposits recorded a higher net inflow of USD 3.9 billion than USD 2.6 billion a year ago.