Current account gap falls further on lower gold imports

MUMBAI (Reuters) - India's current account deficit narrowed to $1.2 billion, or 0.2 percent of gross domestic product, in the January-March quarter, according to Reserve Bank of India data released on Monday, falling for the third straight quarter on the back of a sharp fall in gold imports.

India's balance of payments surplus, however, shrank to $7.1 billion in the March quarter from a $19.1 billion surplus in the December quarter as foreign direct investment slowed, the RBI release showed.

For the full fiscal year 2013/14 that ended March, India's balance of payments stood at $15.5 billion, up from $3.8 billion in 2012/13.

The current account deficit, which touched a record high of $87.8 billion in the 2012/13 fiscal year, eased to $32.4 billion in 2013/14 after a government crackdown on gold imports.

The trade deficit in the January-March period fell to $30.7 billion from $45.6 billion a year earlier, while the capital and financial account surplus fell sharply to $2 billion versus $17.8 billion a year ago.

(Reporting by Suvashree Dey Choudhury, Neha Dasgupta and Swati Bhat; Editing by Tony Munroe)