Preliminary data on India’s balance of payments (BoP) for the third quarter (Q3), i.e., October-December 2019-20, are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q3 of 2019-20

• India’s current account deficit (CAD) narrowed sharply to US$ 1.4 billion (0.2 per cent of GDP) in Q3 of 2019-20 from US$ 17.7 billion (2.7 per cent of GDP) in Q3 of 2018-19 and US$ 6.5 billion (0.9 per cent of GDP) in the preceding quarter, i.e., Q2 of 2019-20.

• The contraction in the CAD was primarily on account of a lower trade deficit at US$ 34.6 billion and a rise in net services receipts at US$ 21.9 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, travel and financial services.

• Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to US$ 20.6 billion, up by 9.0 per cent from their level a year ago.

• In the financial account, net foreign direct investment at US$ 10.0 billion was higher than US$ 7.3 billion in Q3 of 2018-19.

• Foreign portfolio investment recorded net inflow of US$ 7.8 billion – as against an outflow of US$ 2.1 billion in Q3 of 2018-19 – on account of net purchases in both the debt and equity market.

• Net inflow on account of external commercial borrowings to India was US$ 3.2 billion as compared with US$ 2.0 billion in Q3 of 2018-19.

• There was an accretion of US$ 21.6 billion to the foreign exchange reserves (on BoP basis) as against a depletion of US$ 4.3 billion in Q3 of 2018-19 (Table 1).

BoP during April-December 2019-20

• The CAD narrowed to 1.0 per cent of GDP in April-December of 2019-20 from 2.6 per cent in April-December of 2018-19 on the back of a reduction in the trade deficit which shrank to US$ 118.9 billion in April-December 2019-20 from US$ 145.1 billion in April-December of 2018-19.

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

• Net FDI inflows at US$ 32.1 billion in April-December of 2019-20 were higher than US$ 24.3 billion in April-December of 2018-19.

• Portfolio investment recorded a net inflow of US$ 15.1 billion in April-December of 2019-20 as against an outflow of US$ 11.9 billion a year ago.

• In April-December 2019-20, there was an accretion of US$ 40.7 billion of the foreign exchange reserves (on a BoP basis).

(Yogesh Dayal)     
Chief General Manager

Press Release: 2019-2020/2050