Preliminary data on India’s balance of payments (BoP) for the first quarter (Q1) i.e., April-June 2015-16 are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q1 of 2015-16

• India’s current account deficit (CAD) narrowed to US$ 6.2 billion (1.2 per cent of GDP) in Q1 of 2015-16 from US$ 7.8 billion (1.6 per cent of GDP) a year ago.

• This improvement was mainly on account of the merchandise trade deficit (US$ 34.2 billion during Q1 of 2015-16) which contracted on a year-on-year (y-o-y) basis due to a larger absolute decline in merchandise imports relative to merchandise exports.

• The reduction in the CAD was also enabled by higher net earnings through services and lower outflow on account of primary income (profit, dividend and interest).

• Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 16.2 billion, a marginal decline from their level a year ago.

• In the financial account, net inflows of foreign direct investment were higher on a y-o-y basis, however, portfolio investment declined sharply, almost entirely in the debt segment.

• Non-resident Indian (NRI) deposits received by commercial banks during the quarter at US$ 5.9 billion were more than double the net inflow into these accounts in Q1 of last year.

• Net loans availed by banks witnessed an inflow of US$ 5.4 billion, mainly on account of a fall in foreign currency assets held abroad by banks.

• In April-June 2015 there was net accretion of US$ 11.4 billion to India’s foreign exchange reserves on a BoP basis; which was marginally higher than the accretion in the corresponding quarter of last year (Table 1).

Alpana Killawala
Principal Chief General Manager

Press Release : 2015-2016/657