Current account deficit narrows to $11.2 billion in Q2FY25

The current account deficit (CAD), the difference between total imports and exports, reached $11.2 billion or 1.2% of GDP in July-September quarter of this year, compared with a revised deficit of $11.3 billion or 1.3% of GDP in the same quarter a year ago, the Reserve Bank of India (RBI) said in a release.

The deficit stood at a $9.7 billion or 1.1% of GDP in the preceding quarter. Earlier, India had logged a current account deficit of a $9.7 billion or 1.1% of GDP in April-June this year.

The central bank in the statement said that the merchandise trade deficit increased to $ 75.3 billion when compared to same period last year.

Additionally, net services receipts increased to $ 44.5 billion in this quarter as against same quarter last year. Net services receipts increased to $ 44.5 billion from $ 39.9 billion a year ago. “Services exports have risen on a yoy basis across major categories such as computer services, business services, travel services and transportation services,” said RBI in its statement.

Moreover, non-resident deposits (NRI deposits) recorded net inflows of $ 6.2 billion, higher than $ 3.2 billion a year ago.

In the financial account, net foreign direct investment recorded an outflow of $ 2.2 billion in Q2FY25 compared with an outflow of $ 0.8 billion in the corresponding period of FY24. Net inflows under foreign portfolio investment increased to $19.9 billion in this quarter as compared to $ 4.9 billion in FY24.Private transfer receipts, which are mainly remittances by Indians working overseas, rose to $31.9 billion from $28.1 billion a year ago.India’s balance of payments (BoP) was a surplus of $18.6 billion in July-September, compared with a surplus of $2.5 billion in the year-ago period, the RBI said.