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India’s Balance of Payments during 3rd Quarter (Oct-Dec) of 2018-19

Mar 29, 2019: Preliminary data on India’s balance of payments (BoP) for the third quarter (Q3), i.e., October-December 2018-19, are presented in Statements I (BPM6 format) and II (old format). (Check RBI portal for copies of Statements).

Key Features of India’s BoP in Q3 of 2018-19

• India’s current account deficit (CAD) at US$ 16.9 billion (2.5 per cent of GDP) in Q3 of 2018-19 increased from US$ 13.7 billion (2.1 per cent of GDP) in Q3 of 2017-18, but moderated from US$ 19.1 billion (2.9 per cent of GDP) in the preceding quarter.

• The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit at US$ 49.5 billion as compared with US$ 44.0 billion a year ago.

• Net services receipts increased by 2.8 per cent on a y-o-y basis mainly on the back of a rise in net earnings from telecommunications, computer and information services and financial services.

• Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 18.7 billion, increasing by 6.3 per cent from their level a year ago.

• In the financial account, net foreign direct investment at US$ 7.5 billion in Q3 of 2018-19 increased from US$ 4.3 billion in Q3 of 2017-18.

• Portfolio investment recorded net outflow of US$ 2.1 billion in Q3 of 2018-19 – as compared with an inflow of US$ 5.3 billion in Q3 last year – on account of net sale in the equity market.

• Net inflow on account of external commercial borrowings increased to US$ 2.0 billion in Q3 of 2018-19 from US$ 0.3 billion a year ago.

• In Q3 of 2018-19, there was a depletion of US$ 4.3 billion of the foreign exchange reserves (on BoP basis) as against an accretion of US$ 9.4 billion in Q3 of 2017-18 (Table 1).

BoP during April-December 2018

• The CAD increased to 2.6 per cent of GDP during April-December 2018 from 1.8 per cent April-December 2017 on the back of widening of the trade deficit.

• India’s trade deficit increased to US$ 145.3 billion in April-December 2018 from US$ 118.4 billion in April-December 2017.

• Net invisible receipts were higher in April-December 2018 mainly due to increase in net services earnings and private transfer receipts.

• Net FDI inflows in April-December 2018 increased to US$ 24.8 billion from US$ 23.9 billion in April-December 2017.

• Portfolio investment recorded a net outflow of US$ 11.9 billion in April-December 2018 as against an inflow of US$ 19.8 billion a year ago.

• In April-December 2018, there was a depletion of US$ 17.5 billion of the foreign exchange reserves (on a BoP basis).


Table 1: Major Items of India's Balance of Payments
India’s Balance of Payments during 3rd Quarter (Oct-Dec) of 2018-19

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