Developments in India’s Balance of Payments during the Fourth Quarter (January-March) of 2023-24

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ପ୍ରକାଶିତ ତାରିଖ ଜୁନ 24, 2024

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Developments in India’s Balance of Payments during the Fourth Quarter (January-March) of 2023-24

Preliminary data on India’s balance of payments (BoP) for the fourth quarter (Q4), i.e., January-March 2023-24, are presented in Statements I and II.

Key Features of India’s BoP in Q4:2023-24

India’s current account balance recorded a surplus of US$ 5.7 billion (0.6 per cent of GDP) in Q4:2023-24 as against a deficit of US$ 8.7 billion (1.0 per cent of GDP) in Q3:2023-24¹ and US$ 1.3 billion (0.2 per cent of GDP) a year ago [i.e., Q4:2022-23]² .
The merchandise trade deficit at US$ 50.9 billion in Q4:2023-24 was lower than US$ 52.6 billion a year ago.
Services exports grew by 4.1 per cent on a y-o-y basis in Q4:2023-24 on the back of rising exports of software, travel and business services. Net services receipt at US$ 42.7 billion was higher than its level a year ago (US$ 39.1 billion), which contributed to the surplus in the current account balance during Q4:2023-24.
Net outgo on the primary income account, primarily reflecting payments of investment income, increased to US$ 14.8 billion from US$ 12.6 billion a year ago.
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 32.0 billion, an increase of 11.9 per cent over their level a year ago.
In the financial account, net foreign direct investment flows were US$ 2.0 billion in Q4:2023-24 as compared with US$ 6.4 billion a year ago.
Foreign portfolio investment recorded a net inflow of US$ 11.4 billion in Q4:2023-24 as against a net outflow of US$ 1.7 billion during Q4:2022-23.
Net inflows under external commercial borrowings to India amounted to US$ 2.6 billion in Q4:2023-24 as compared with US$ 1.7 billion a year ago.
Non-resident deposits recorded a higher net inflow of US$ 5.4 billion than US$ 3.6 billion in Q4:2022-23.
There was an accretion of foreign exchange reserves (on a BoP basis i.e., excluding valuation effects) to the tune of US$ 30.8 billion in Q4:2023-24 as compared with an accretion of US$ 5.6 billion a year ago (Table 1).

BoP during 2023-24

India’s current account deficit moderated to US$ 23.2 billion (0.7 per cent of GDP) during 2023-24 from US$ 67.0 billion (2.0 per cent of GDP) during the previous year on the back of a lower merchandise trade deficit.
Net invisibles receipt was higher during 2023-24 than a year ago, primarily on account of services and transfers.
During 2023-24, portfolio investment recorded a net inflow of US$ 44.1 billion as against an outflow of US$ 5.2 billion a year ago.
Net FDI inflow was US$ 9.8 billion during 2023-24 as compared with US$ 28.0 billion in 2022-23.
In 2023-24, there was an accretion of US$ 63.7 billion to the foreign exchange reserves (on a BoP basis).

Table 1: Major Items of India's Balance of Payments
(US$ billion)
	January-March 2023			January-March 2024			2022-23			2023-24
	Credit	Debit	Net	Credit	Debit	Net	Credit	Debit	Net	Credit	Debit	Net
A. Current Account	238	239.3	-1.3	253.6	247.9	5.7	921.9	988.8	-67	942.9	966.1	-23.2
1. Goods	115.8	168.4	-52.6	121.7	172.5	-50.9	456.1	721.4	-265.3	441.5	683.5	-242.1
Of which:
POL	23.9	50.8	-26.9	22.2	49.6	-27.4	97.5	209.4	-111.9	84.2	179.6	-95.5
2. Services	85.8	46.8	39.1	89.4	46.7	42.7	325.3	182	143.3	341.1	178.3	162.8
3. Primary Income	7.7	20.3	-12.6	10.5	25.3	-14.8	27.8	73.8	-45.9	41.5	91.2	-49.8
4. Secondary Income	28.6	3.9	24.8	32.1	3.4	28.7	112.6	11.7	100.9	118.9	13	105.9
B. Capital Account and Financial Account	153.4	152.5	0.9	248.1	254.4	-6.2	702.9	634.9	68	850.3	827.8	22.5
Of which:
Change in Reserve (Increase (-)/Decrease (+))	0	5.6	-5.6	0	30.8	-30.8	30.4	21.2	9.1	0	63.7	-63.7
C. Errors & Omissions (-) (A+B)	0.4	0	0.4	0.5	0	0.5	0	1	-1	0.7	0	0.7
P: Preliminary.
Note: Total of subcomponents may not tally with aggregate due to rounding off.

(Puneet Pancholy)
Chief General Manager

Press Release: 2024-2025/550

[1] The current account deficit for Q3:2023-24 was revised to US$ 8.7 billion from US$ 10.5 billion earlier due to downward adjustment of customs data on merchandise imports.

[2] https://website.rbi.org.in/web/rbi/-/press-releases/developments-in-india-s-balance-of-payments-during-the-fourth-quarter-january-march-of-2022-23-55933. For longer time series data, please see:CIMS DBIE (rbi.org.in)› Statistics › External Sector › International Trade › Quarterly/Yearly.