Developments in India’s Balance of Payments during the First Quarter (April-June) of 2018-19

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Developments in India’s Balance of Payments during the First Quarter (April-June) of 2018-19

Preliminary data on India’s balance of payments (BoP) for the first quarter (Q1), i.e., April-June 2018-19, are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q1 of 2018-19

India’s current account deficit (CAD) stood at US$ 15.8 billion (2.4 per cent of GDP) in Q1 of 2018-19 as compared with US$ 15.0 billion (2.5 per cent of GDP) in Q1 of 2017-18.
The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit at US$ 45.7 billion as compared with US$ 41.9 billion a year ago.
Net services receipts increased by 2.1 per cent on a y-o-y basis mainly on the back of a rise in net earnings from software and financial services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 18.8 billion, increasing by 16.9 per cent from their level a year ago.
In the financial account, net foreign direct investment at US$ 9.7 billion in Q1 of 2018-19 was higher than US$ 7.1 billion in Q1 of 2017-18.
Portfolio investment recorded net outflow of US$ 8.1 billion in Q1 of 2018-19 – as compared with an inflow of US$ 12.5 billion in Q1 last year – on account of net sales in both the debt and equity markets.
Net receipts on account of non-resident deposits amounted to US$ 3.5 billion in Q1 of 2018-19 as compared with US$ 1.2 billion a year ago.
In Q1 of 2018-19, there was a depletion of US$ 11.3 billion of the foreign exchange reserves (on BoP basis) as against an accretion of US$ 11.4 billion in Q1 of 2017-18 (Table 1).

Table 1: Major Items of India's Balance of Payments
(US$ Billion)
	April-June 2018 P			April-June 2017 PR
	Credit	Debit	Net	Credit	Debit	Net
A. Current Account	155.7	171.5	-15.8	139.9	154.9	-15.0
1. Goods	83.4	129.1	-45.7	73.1	115.1	-41.9
Of which:
POL	11.9	34.7	-22.8	7.5	22.8	-15.4
2. Services	48.2	29.5	18.7	45.9	27.6	18.3
3. Primary Income	5.3	11.1	-5.8	4.7	10.6	-5.8
4. Secondary Income	18.8	1.7	17.1	16.1	1.6	14.5
B. Capital Account and Financial Account	142.4	125.9	16.6	155.7	140.2	15.5
Of which:
Change in Reserves (Increase (-)/Decrease (+))	11.3	0.0	11.3	0.0	11.4	-11.4
C. Errors & Omissions (-) (A+B)		0.8	-0.8		0.6	-0.6
P: Preliminary; PR: Partially Revised
Note: Total of subcomponents may not tally with the aggregate due to rounding off.