India's current account slips into deficit again in September quarter

Wider merchandise trade deficits pulled India's Q2FY22 current account into the negative territory, official data showed on Friday.

The current account swung into negative territory with a deficit of $9.6 billion in Q2FY22 from a surplus of $6.6 billion in the preceding quarter.

On a YoY basis, the country's Balance of Payments was in surplus of $15.3 billion in Q2FY21.

"The deficit in the current account in Q2:2021-22 was mainly due to widening of trade deficit to $44.4 billion from $30.7 billion in the preceding quarter and an increase in net outgo of investment income," the RBI said in a statement.

"Net services receipts decreased marginally over the previous quarter but increased on a year-on-year (yoy) basis, on the back of robust performance of the exports of computer and business services."

However, private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $21.1 billion, an increase of 3.7 per cent from their level a year ago.

"Net outgo from the primary income account, mainly reflecting net overseas investment income payments, increased sequentially as well as on a yoy basis."

In the financial account, net foreign direct investment recorded an inflow of $9.5 billion, lower than $24.4 billion a year ago.

"Net foreign portfolio investment was $3.9 billion as compared with $7 billion in Q2:2020-21.

"Net external commercial borrowings to India recorded inflow of $4.1 billion in Q2:2021-22 as against an outflow of $3.7 billion a year ago."

The net inflow on account of non-resident deposits decreased to $0.8 billion from $1.9 billion in Q2FY21.

--IANS

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