Jun 15, 2017: RBI has released the preliminary data on India’s balance of payments (BoP) for the fourth quarter (Q4) i.e., January-March 2016-17 are presented in Statements I (BPM6 format) and II (old format).
Key Features of India’s BoP in Q4 of 2016-17
- The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit (US$ 29.7 billion) brought about by a larger increase in merchandise imports relative to exports.
- Net services receipts increased on a y-o-y basis on the back of a rise in net earnings from travel, transport, construction and other business services.
- Private transfer receipts, mainly representing remittances by Indians employed overseas, at US$ 15.7 billion remained almost at the same level as in the preceding year.
- In the financial account, net foreign direct investment at US$ 5.0 billion in Q4 of 2016-17 moderated from its level a year ago.
- Net portfolio investment, however, recorded substantial inflow of US$ 10.8 billion in Q4 of 2016-17 in both equity and debt segment, as against net outflow of US$ 1.5 billion in Q4 last year.
- Net receipts on account of non-resident deposits amounted to US$ 2.7 billion in Q4 of 2016-17, lower than US$ 4.4 billion a year ago.
BoP during 2016-17
- India’s trade deficit narrowed to US$ 112.4 billion in 2016-17 from US$ 130.1 billion in 2015-16.
- Net invisible receipts were lower, mainly due to moderation in both software exports and net private transfer receipts, and higher outgo on account of primary income (profit, interest and dividends).
- Gross FDI inflows to India in 2016-17 at US$ 60.2 billion increased significantly from US$ 55.6 billion in 2015-16.
- Net FDI inflows (i.e., net of outward FDI) in 2016-17 at US$ 35.6 billion moderated marginally from US$ 36.0 billion in 2015-16.
- Portfolio investment recorded a net inflow of US$ 7.6 billion in 2016-17 as against an outflow of US$ 4.5 billion a year ago.