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.