India’s current account deficit (CAD) at narrowed to $14.3 billion (2.0 per cent of GDP) in April-June of 2019-20 from $15.8 billion (2.3 per cent of GDP) in Q1 of 2018-19, but was higher than $4.6 billion (0.7 per cent of GDP) in the preceding quarter (January-March 2018-19), preliminary data released by the Reserve bank of India showed.
The CAD contracted on a year-on-year basis, primarily on account of higher invisible receipts of $31.9 billion agaist such receipts of $29.9 billion a year ago.
Net services receipts increased by 7.3 per cent on a y-o-y basis, mainly on the back of a rise in net earnings from travel, financial services and telecommunications, computer and information services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, rose to $19.9 billion, increasing by 6.2 per cent from their level a year ago.
In the financial account, net foreign direct investment stood at $13.9 billion in Q1 of 2019-20 compared with $9.6 billion in Q1 of 2018-19.
Foreign portfolio investments recorded net inflow of $4.8 billion in Q1 of 2019-20, against an outflow of $8.1 billion in Q1 of 2018-19 – on account of net purchases in both debt and equity markets.
Net inflow on account of external commercial borrowings to India was $6.3 billion in Q1 of 2019-20 against an outflow of $1.5 billion a year ago.
In Q1 of 2019-20, there was an accretion of $14.0 billion to the foreign exchange reserves (on BoP basis) against a depletion of $11.3 billion in Q1 of 2018-19.