But it moderated sequentially from $ 16.7 billion (1.8 percent of GDP) in the September 2024 quarter on the back of higher software services income and remittances b the Indian diaspora.
Net services receipts increased to $ 51.2 billion in the December 2024 quarter from $ 45.0 billion a year ago. Services exports have risen on a y-o-y basis across major categories such as business services, computer software services, transportation services and travel services. Net software services earnings which accounts for more than half of services income rose to $ 39.6 billion in the latest quarter from $36.3 billion in the same period a year ago.
Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to $ 35.1 billion during the latest quarter from $ 30.6 billion in the same period a year ago.
“Icra expects the current account to witness a surplus of $4-6 billion in Q4’ FY’ 2025, aided by a seasonal uptick in merchandise exports and the resulting moderation in the merchandise trade deficit, as well as healthy services surpluses” said Aditi Nayar, chief economist and head – research & outreach at ratings firm Icra. “ Overall, we expect the CAD to print at 0.8% of GDP in FY’2025”.
In the financial account, foreign direct investment recorded a net outflow of $ 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 too recorded a net outflow of $ 11.4 billion in Q3’2024-25 as against an inflow of $ 12.0 billion in Q3’2023-24. Net inflows under external commercial borrowings amounted to $ 4.3 billion in the latest quarter as against an outflow of $ 2.7 billion in the corresponding period a year ago.Non-resident deposits recorded a net inflow of $ 3.1 billion, lower than $ 3.9 billion a year ago.
Overall the foreign exchange reserves dipped $ 37.7 billion in the latest quarter as against an accretion of $ 6.0 billion in Q3:2023-24.
Content Source: economictimes.indiatimes.com