Developments in India’s Balance of Payments during the Fourth Quarter (January-March) of 2015-16
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.
Table 1: Major Items of India's Balance of Payments
(US$ Billion)
January-March 2016 P
January-March 2015 PR
April-March 2015-16 P
April-March 2014-15 PR
Credit
Debit
Net
Credit
Debit
Net
Credit
Debit
Net
Credit
Debit
Net
A. Current Account
124.7
125.0
-0.3
134.2
134.9
-0.7
501.4
523.5
-22.1
558.2
585.0
-26.8
1. Goods
65.8
90.6
-24.8
71.8
103.4
-31.6
266.4
396.4
-130.1
316.5
461.5
-144.9
Of which:
POL
6.1
14.6
-8.5
8.2
21.8
-13.5
30.4
82.9
-52.4
56.8
138.3
-81.5
2. Services
39.4
23.3
16.1
41.4
21.3
20.0
154.3
84.6
69.7
158.1
81.6
76.5
3. Primary Income
3.7
10.3
-6.6
3.5
9.1
-5.6
14.7
39.1
-24.4
13.4
37.5
-24.1
4. Secondary Income
15.7
0.7
15.0
17.5
1.1
16.4
66.0
3.3
62.7
70.1
4.4
65.8
B. Capital Account and Financial Account
127.3
127.2
0.2
149.4
149.5
-0.1
510.9
487.8
23.2
550.9
523.1
27.8
Of which:
Change in Reserve (Increase (-)/Decrease (+))
0.0
3.3
-3.3
0.0
30.1
-30.1
0.9
18.8
-17.9
0.0
61.4
-61.4
C. Errors & Omissions (-) (A+B)
0.2
0.0
0.2
0.8
0.0
0.8
0.4
1.5
-1.1
1.1
2.1
-1.0
P: Preliminary PR: Partially Revised
Note: Total of sub-components may not tally with aggregate due to rounding off.
Ajit Prasad Assistant Adviser
Press Release : 2015-2016/2925
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