Preliminary data on India’s balance of payments (BoP) for the fourth quarter (Q4), i.e., January-March 2019-20, are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q4 of 2019-20

• India’s current account balance (CAB) recorded a marginal surplus of US$ 0.6 billion (0.1 per cent of GDP) in Q4 of 2019-20 as against a deficit of US$ 4.6 billion (0.7 per cent of GDP) in Q4 of 2018-19 and US$ 2.6 billion (0.4 per cent of GDP) in the preceding quarter, i.e., Q3 of 2019-20.

• The surplus in the current account in Q4 of 2019-20 was primarily on account of a lower trade deficit at US$ 35.0 billion and a sharp rise in net invisible receipts at US$ 35.6 billion as compared with the corresponding period of last year.

• Net services receipts increased on the back of a rise in net earnings from computer and travel services on a year-on-year basis.

• Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to US$ 20.6 billion, up by 14.8 per cent from their level a year ago.

• Net outgo from the primary income account, primarily reflecting net overseas investment income payments, decreased to US$ 4.8 billion from US$ 6.9 billion a year ago.

• In the financial account, net foreign direct investment at US$ 12.0 billion was higher than US$ 6.4 billion in Q4 of 2018-19.

• Foreign portfolio investment (FPI) declined by US$ 13.7 billion as against an increase of US$ 9.4 billion in Q4 of 2018-19 – on account of net sales in both the debt and equity markets.

• Net inflow on account of external commercial borrowings to India was US$ 9.4 billion in Q4 of 2019-20 as compared with US$ 7.2 billion a year ago.

• Owing to COVID-19 related uncertainty, net inflows under ‘other capital’ surged during the quarter, reflecting inter alia the FPIs’ outstanding balances with custodian banks and pending issuance of shares by FDI companies.

• There was an accretion of US$ 18.8 billion to the foreign exchange reserves (on a BoP basis) as compared with an accretion of US$ 14.2 billion in Q4 of 2018-19 (Table 1).

BoP during 2019-20

• The CAD narrowed to 0.9 per cent of GDP in 2019-20 from 2.1 per cent in 2018-19 on the back of the trade deficit which shrank to US$ 157.5 billion in 2019-20 from US$ 180.3 billion in 2018-19.

• Net invisible receipts were higher in 2019-20 mainly due to increase in net services earnings and private transfer receipts.

• Net FDI inflows at US$ 43.0 billion in 2019-20 were higher than US$ 30.7 billion in 2018-19.

• Portfolio investment increased by US$ 1.4 billion in 2019-20 as against an outflow of US$ 2.4 billion a year ago.

• In 2019-20, there was an accretion of US$ 59.5 billion to foreign exchange reserves (on a BoP basis).

(Yogesh Dayal)     
Chief General Manager

Press Release: 2019-2020/2568