Developments in India’s Balance of Payments during the First Quarter (April-June) of 2019-20 -June) of 2019

Back

Published on September 30, 2019

PDF (329.91 KB)

Developments in India’s Balance of Payments during the First Quarter (April-June) of 2019-20

Preliminary data on India’s balance of payments (BoP) for the first quarter (Q1), i.e., April-June 2019-20, are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q1 of 2019-20

India’s current account deficit (CAD) at US$ 14.3 billion (2.0 per cent of GDP) in Q1 of 2019-20 narrowed from US$ 15.8 billion (2.3 per cent of GDP) in Q1 of 2018-19 but was higher than US$ 4.6 billion (0.7 per cent of GDP) in the preceding quarter.
The CAD contracted on a year-on-year (y-o-y) basis, primarily on account of higher invisible receipts at US$ 31.9 billion as compared with US$ 29.9 billion a year ago.
Net services receipts increased by 7.3 per cent on a y-o-y basis, mainly on the back of a rise in net earnings from travel, financial services and telecommunications, computer and information services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, rose to US$ 19.9 billion, increasing by 6.2 per cent from their level a year ago.
In the financial account, net foreign direct investment was US$ 13.9 billion in Q1 of 2019-20 as compared with US$ 9.6 billion in Q1 of 2018-19.
Foreign portfolio investment recorded net inflow of US$ 4.8 billion in Q1 of 2019-20 – as against an outflow of US$ 8.1 billion in Q1 of 2018-19 – on account of net purchases in both debt and equity markets.
Net inflow on account of external commercial borrowings to India was US$ 6.3 billion in Q1 of 2019-20 as against an outflow of US$ 1.5 billion a year ago.
In Q1 of 2019-20, there was an accretion of US$ 14.0 billion to the foreign exchange reserves (on BoP basis) as against a depletion of US$ 11.3 billion in Q1 of 2018-19 (Table 1).

Table 1: Major Items of India's Balance of Payments
(US$ Billion)
	April-June 2019 (P)			April-June 2018
	Credit	Debit	Net	Credit	Debit	Net
A. Current Account	160.7	175.0	-14.3	155.7	171.5	-15.8
1. Goods	82.7	128.9	-46.2	83.4	129.1	-45.8
Of which:
POL	11.6	35.0	-23.4	11.8	34.8	-23.0
2. Services	52.2	32.2	20.0	48.2	29.5	18.7
3. Primary Income	5.8	11.9	-6.1	5.4	11.1	-5.8
4. Secondary Income	20.0	2.0	18.0	18.8	1.7	17.1
B. Capital Account and Financial Account	141.0	127.2	13.9	142.6	126.5	16.1
Of which:
Change in Reserves (Increase (-)/Decrease (+))		14.0	-14.0	11.3		11.3
C. Errors & Omissions (-) (A+B)	0.4		0.4		0.3	-0.3
P: Preliminary
Note: Total of subcomponents may not tally with aggregate due to rounding off.