Preliminary data on India’s balance of payments (BoP) for the fourth quarter (Q4) i.e., January-March 2015-16 are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q4 of 2015-16

• India’s current account deficit (CAD) narrowed sharply to US$ 0.3 billion (0.1 per cent of GDP) in Q4 of 2015-16, significantly lower than US$ 7.1 billion (1.3 per cent of GDP) in Q3 of 2015-16 and marginally lower than US$ 0.7 billion (0.1 per cent of GDP) in Q4 of 2014-15 (Table 1).

• The contraction in CAD was primarily on account of a lower trade deficit (US$ 24.8 billion) than in Q4 of last year (US$ 31.6 billion) and US$ 34.0 billion in the preceding quarter.

• Net services receipts declined on a y-o-y basis largely due to fall in exports of transport, financial services and telecommunication, computer and information services.

• Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 15.7 billion, a decline from their level in the preceding quarter as well as from a year ago.

• Net foreign direct investment moderated to US$ 8.8 billion in Q4 of 2015-16 from US$ 9.3 billion in Q4 of 2014-15.

• Portfolio investment recorded a net outflow of US$ 1.5 billion in Q4 of 2015-16 as against a net inflow of US$ 12.5 billion in the corresponding period of last year; primarily reflecting net outflow in the debt segment.

• Non-resident Indian (NRI) deposits, however, increased in Q4 of 2015-16 over their level in Q4 last year as well as the preceding quarter.

• Foreign exchange reserves (on a BoP basis) increased by US$ 3.3 billion in Q4 of 2015-16.

BoP during April-March 2015-16

• The CAD narrowed to 1.1 per cent of GDP in 2015-16 from 1.3 per cent in 2014-15, on the back of contraction in the trade deficit.

• India’s trade deficit narrowed to US$ 130.1 billion in 2015-16 from US$ 144.9 billion in 2014-15.

• Net invisible receipts declined in 2015-16, primarily reflecting moderation in both net services earnings and private transfer receipts.

• Net FDI inflows during 2015-16 (US$ 36.0 billion) rose sharply by 15.3 per cent over the level in 2014-15.

• Portfolio investment, however, recorded a net outflow US$ 4.5 billion in 2015-16 as against a net inflow of US$ 40.9 billion last year.

• In 2015-16, there was an accretion of US$ 17.9 billion to foreign exchange reserves (on a BoP basis) as compared with US$ 61.4 billion in 2014-15.

Ajit Prasad
Assistant Adviser

Press Release : 2015-2016/2925