India's current account deficit narrows to 1.2% of GDP in Q1 of 2015-16

Net accretion to India's foreign exchange reserves was US$ 11.4 billion in Q1 of 2015-16

India's current account deficit (CAD) narrowed to US$ 6.2 billion (1.2% of GDP) in Q1 of 2015-16 from US$ 7.8 billion (1.6% of GDP) a year ago. This improvement was mainly on account of the merchandise trade deficit (US$ 34.2 billion during Q1 of 2015-16) which contracted on a year-on-year (y-o-y) basis due to a larger absolute decline in merchandise imports relative to merchandise exports.

The reduction in the CAD was also enabled by higher net earnings through services and lower outflow on account of primary income (profit, dividend and interest).

Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 16.2 billion, a marginal decline from their level a year ago.

In the financial account, net inflows of foreign direct investment were higher on a y-o-y basis, however, portfolio investment declined sharply, almost entirely in the debt segment.

Non-resident Indian (NRI) deposits received by commercial banks during the quarter at US$ 5.9 billion were more than double the net inflow into these accounts in Q1 of last year.

Net loans availed by banks witnessed an inflow of US$ 5.4 billion, mainly on account of a fall in foreign currency assets held abroad by banks.

In April-June 2015 there was net accretion of US$ 11.4 billion to India's foreign exchange reserves on a BoP basis; which was marginally higher than the accretion in the corresponding quarter of last year.

Powered by Capital Market - Live News