India's current account deficit narrows to $10.5 bn in Oct-Dec: RBI

India's current account deficit declined to $10.5 billion or 1.2 per cent of the GDP in October-December quarter from $11.4 billion in the previous three months and $16.8 billion a year back, the Reserve Bank of India (RBI) said on Tuesday.

Net FDI inflow at $8.5 billion during April-December 2023 was lower than $21.6 billion during April-December 2022, it said.

Also, accretion of foreign exchange reserves (on a BoP basis) was at $6.0 billion in October-December (third quarter of 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 $2.0 billion in Q3 of 2022-23.

Foreign portfolio investment recorded a net inflow of $12.0 billion in the quarter, higher than $4.6 billion a year back.

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.