India’s Q3 CAD narrows to $10.5 billion from $16.8 billion a year earlier

India’s current account balance recorded a deficit of US$ 10.5 billion (1.2% of GDP) in Q3:FY24, lower than US$ 16.8 billion (2.0% of GDP) a year ago and US$ 11.4 billion (1.3% of GDP) in Q2:FY24, as per data released by the Reserve Bank of India (RBI) on Tuesday. 

India’s current account balance recorded a deficit of $10.5 billion (1.2% of GDP) in Q3 FY24, lower than $16.8 billion (2.0% of GDP) a year earlier and $11.4 billion (1.3% of GDP) in Q2 FY24, as per data released by the Reserve Bank of India (RBI) on Tuesday.

The current account deficit as per cent of GDP for Q2 FY24 underwent an upward revision to 1.3% from 1% earlier due to an upward adjustment of customs data on merchandise imports, the RBI said.

The merchandise trade deficit at $71.6 billion was marginally higher than $71.3 billion during Q3 FY23. Services exports grew by 5.2% on a year-on-year (YoY) basis on the back of rising exports of software, business and travel services, data showed.

“Net services receipts increased both sequentially and from a year ago that helped cushion the current account deficit,” the RBI said.

Net outgo on the primary income account, primarily reflecting payments of investment income, increased to $13.2 billion from $12.7 billion a year earlier. Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $31.4 billion, up 2.1% over same period a year earlier.

In the financial account, foreign direct investment recorded a net inflow of $4.2 billion as compared with a net inflow of $2.0 billion in Q3 FY23.

Foreign portfolio investment recorded a net inflow of $12.0 billion, higher than $4.6 billion during Q3 FY23.