India’s current account deficit (CAD) declined to $10.5 billion, or 1.2 per cent of the GDP, in the October-December 2023 quarter, according to the latest RBI data released on Tuesday. The country’s CAD had stood at $11.4 billion during July-September 2023 and $16.8 billion a year ago.
India’s net FDI inflow at $8.5 billion during April-December 2023 was lower than $21.6 billion during April-December 2022, the RBI said on Tuesday.
Also, the accretion of foreign exchange reserves (on a balance of payment basis) was at $6 billion in October-December (third quarter of the current financial year that ends on March 31) compared to an accretion of $11.1 billion a year ago.
The merchandise trade deficit at $71.6 billion was marginally higher than $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 $4.2 billion, more than double of net inflow of $2 billion in Q3 of 2022-23. Foreign portfolio investment recorded a net inflow of $12 billion in the quarter, higher than $4.6 billion a year ago.
External commercial borrowings to India recorded a net outflow of $2.6 billion in October-December as compared to a net outflow of $2.5 billion a year ago. Non-resident deposits recorded a higher net inflow of $3.9 billion than $2.6 billion a year ago.
(With PTI Inputs)
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