India's Current Account Deficit stood at US$11.5 billion or 1.1% of GDP in Q3FY25

The Reserve Bank of India (RBI) has stated today that India's current account deficit (CAD) increased to US$ 11.5 billion (1.1 per cent of GDP) in Q3:2024-25 from US$ 10.4 billion (1.1 per cent of GDP) in Q3:2023-24 but moderated from US$ 16.7 billion (1.8 per cent of GDP)1 in Q2:2024-25.

Merchandise trade deficit increased to US$ 79.2 billion in Q3:2024-25 from US$ 71.6 billion in Q3:2023-24. Net services receipts increased to US$ 51.2 billion in Q3:2024-25 from US$ 45.0 billion a year ago. Services exports have risen on a y-o-y basis across major categories such as business services, computer services, transportation services and travel services.

Net outgo on the primary income account, primarily reflecting payments of investment income, increased to US$ 16.7 billion in Q3:2024-25 from US$ 13.1 billion in Q3:2023-24.Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to US$ 35.1 billion in Q3: 2024-25 from US$ 30.6 billion in Q3:2023-24.

In the financial account, foreign direct investment recorded a net outflow of US$ 2.8 billion in Q3:2024-25 as against an inflow of US$ 4.0 billion in the corresponding period of 2023-24.

Foreign portfolio investment recorded a net outflow of US$ 11.4 billion in Q3:2024-25 as against an inflow of US$ 12.0 billion in Q3:2023-24.

Net inflows under external commercial borrowings (ECBs) to India amounted to US$ 4.3 billion in Q3:2024-25, as against an outflow of US$ 2.7 billion in the corresponding period a year ago.

Non-resident deposits (NRI deposits) recorded a net inflow of US$ 3.1 billion, lower than US$ 3.9 billion a year ago.

There was a depletion of US$ 37.7 billion to the foreign exchange reserves (on a BoP basis) in Q3:2024-25 as against an accretion of US$ 6.0 billion in Q3:2023-24 (Table 1).
India's CAD widened to US$ 37.0 billion (1.3 per cent of GDP) during April-December 2024 from US$ 30.6 billion (1.1 per cent of GDP) during April-December 2023 primarily on account of a higher merchandise trade deficit.

Net invisible receipts were higher during April-December 2024 than a year ago on account of services and transfers. Net FDI inflow at US$ 1.6 billion during April-December 2024 was lower than US$ 7.8 billion during April-December 2023.

During April-December 2024, portfolio investment recorded a net inflow of US$ 9.4 billion, lower than US$ 32.7 billion during the corresponding period a year ago.

There was a depletion of US$ 13.8 billion to the foreign exchange reserves (on a BoP basis) during April-December 2024

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