Preliminary data on India’s balance of payments (BoP) for the fourth quarter (Q4), i.e., January-March 2021-22, are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q4:2021-22

• India’s current account deficit (CAD) decreased to US$ 13.4 billion (1.5 per cent of GDP) in Q4:2021-22 from US$ 22.2 billion (2.6 per cent of GDP) in Q3:2021-22.

• The sequential decline in CAD in Q4:2021-22 was mainly on account of a moderation in trade deficit and lower net outgo of primary income.

• Net services receipts increased, both sequentially and on a year-on-year (y-o-y) basis, on the back of a rise in net earnings from computer and business services.

• Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to US$ 23.7 billion, up by 13.4 per cent from their level a year ago.

• Net outgo from the primary income account, largely reflecting net income payments on foreign investment, decreased sequentially as well as on a y-o-y basis.

• In the financial account, net foreign direct investment (FDI) at US$ 13.8 billion was higher than US$ 2.7 billion in Q4:2020-21.

• Net foreign portfolio investment (FPI) recorded an outflow of US$ 15.2 billion – mainly from the equity market.

• Net external commercial borrowings (ECBs) to India were lower at US$ 3.3 billion in Q4:2021-22 as compared with US$ 6.1 billion a year ago.

• There was a drawdown of US$ 16.0 billion in the foreign exchange reserves (on a BoP basis) as against an accretion of US$ 3.4 billion in Q4:2020-21 (Table 1).

BoP during 2021-22

• The current account balance recorded a deficit of 1.2 per cent of GDP in 2021-22 as against a surplus of 0.9 per cent in 2020-21 as the trade deficit widened to US$ 189.5 billion from US$ 102.2 billion a year ago.

• Net invisible receipts were higher in 2021-22 due to increase in net exports of services and net private transfer receipts, even though net income outgo was higher than a year ago.

• Net FDI inflows at US$ 38.6 billion in 2021-22 were lower than US$ 44.0 billion in 2020-21.

• Net FPI recorded an outflow of US$ 16.8 billion in 2021-22 as against an inflow of US$ 36.1 billion a year ago.

• Net ECBs to India recorded an inflow of US$ 7.4 billion in 2021-22 as compared with US$ 0.2 billion in 2020-21.

• In 2021-22, there was an accretion of US$ 47.5 billion to foreign exchange reserves (on a BoP basis).

(Yogesh Dayal)     
Chief General Manager

Press Release: 2022-2023/408