Mar 16, 2018: Preliminary data on India’s balance of payments (BoP) for the third quarter (Q3), i.e., October-December 2017-18 are presented in Statements I (BPM6 format) and II (old format).
Key Features of India’s BoP in Q3 of 2017-18
o India’s current account deficit (CAD) at US$ 13.5 billion (2.0 per cent of GDP) in Q3 of 2017-18 increased from US$ 8.0 billion (1.4 per cent of GDP) in Q3 of 2016 -17 and US$ 7.2 billion (1.1 per cent of GDP) in the preceding quarter.
o The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit (US$ 44.1 billion) brought about by a larger increase in merchandise imports relative to exports.
o Net services receipts increased by 17.8 per cent on a y-o-y basis mainly on the back of a rise in net earnings from software services and travel receipts.
o Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 17.6 billion, increasing by 16.0 per cent from their level a year ago.
o In the financial account, net foreign direct investment at US$ 4.3 billion in Q3 of 2017-18 was lower than US$ 9.7 billion in Q3 of 2016-17.
o Portfolio investment recorded net inflow of US$ 5.3 billion in Q3 of 2017-18 - as against an outflow of US$ 11.3 billion in Q3 last year - on account of net purchases in both the debt and equity markets.
o Net receipts on account of non-resident deposits amounted to US$ 3.1 billion in Q3 of 2017-18 as against net repayments of US$ 18.5 billion a year ago.
o In Q3 of 2017-18, there was an accretion of US$ 9.4 billion to the foreign exchange reserves (on BoP basis) as against depletion of US$ 1.2 billion in Q3 of 2016-17 (Table 1).
BoP during April-December 2017
o On a cumulative basis, the CAD increased to 1.9 per cent of GDP in April-December 2017 from 0.7 per cent in the corresponding period of 2016-17 on the back of a widening of the trade deficit.
o India’s trade deficit increased to US$ 118.9 billion in April-December 2017 from US$ 82.7 billion in April-December 2016.
o Net invisible receipts were higher in April-December 2017 mainly due to increase in net services earnings and private transfer receipts.
o Net FDI inflows during April-December 2017 moderated to US$ 23.7 billion from US$ 30.6 billion during the corresponding period of the previous year.
o Portfolio investment recorded a net inflow of US$ 19.8 billion during April-December 2017 as against a net outflow of US$ 3.2 billion a year ago.
o In April-December 2017, there was an accretion of US$ 30.3 billion to the foreign exchange reserves.
Table 1: Major Items of India's Balance of Payments
Note: Total of subcomponents may not tally with the aggregate due to rounding off.