India's CAD likely to shoot up as net exports hit nine-year low

India's CAD stood at 2.8 per cent of GDP in Q1FY23, compared with 1.5 per cent of GDP in the January-March quarter of 2021-22

India’s current account deficit (CAD) may shoot up in the July-September quarter (second quarter, or Q2) of 2022-23 (FY23), with the net export ratio touching a fresh nine-year low at 5.89 per cent of gross domestic product (GDP) in Q2.

A part of the GDP figure, the net export data — which is usually negative for India — captures the difference between exports and imports of both goods and services, while the CAD data, released by the Reserve Bank of India (RBI), also factors in private transfer receipts. Thus, CAD represents remittances by Indians employed overseas, along with net exports.