India posts 0.2% current account deficit in December quarter, Auto News, ET Auto

A favorable balance of payments situation has led to the constitution of foreign exchange reserves in recent months.

india current account switched to a deficit for the first time in the current tax, the difference amounting to 1.7 billion USD, or 0.2% of the GDP in the December quarter.

In the current exercise, as the pandemic impacted Trade, the current account was in surplus in the previous two quarters, at $ 15.1 billion and $ 19 billion, respectively, according to balance of payments data released by the RBI on Wednesday.

The critical measure of a country’s external strength now stands at a surplus of 1.7% of GDP for the first nine months of the fiscal year, compared with a deficit of 1.2% in the period of the fiscal year. last year.

In the December quarter, the merchandise trade deficit widened to $ 34.5 billion from $ 14.8 billion in the previous quarter, and an increase in the net balance investment income payments.

Net service revenue increased to $ 23.6 billion, both sequentially and year on year, mainly due to higher net export revenue from IT services, the RBI said.

Private transfer receipts, which primarily represent diaspora remittances, amounted to $ 20.7 billion for the quarter under review. This is a marginal decrease compared to the period October-December 2019, but a gain of 1.5% compared to the period July-September 2020.

According to the data, net outflows to the primary income account, mainly reflecting investment income payments, increased to $ 10.1 billion from $ 7.4 billion a year ago.

In the financial account, net foreign direct investment registered a large inflow of USD 17 billion in the December quarter, compared to USD 9.7 billion in the period of the previous year.

With repayments exceeding new disbursements, commercial borrowing from outside India recorded a net outflow of $ 1.7 billion in the December quarter compared to an inflow of $ 3.2 billion a year ago. he indicated.

Net accretions on non-resident deposits rose to $ 3 billion from $ 0.8 billion in Q3FY20, he said.

There was a $ 32.5 billion increase in foreign exchange reserves on a balance of payments basis, up from $ 21.6 billion in the third quarter of fiscal 2020, according to RBI data.

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