Developments in India’s Balance of Payments during the First Quarter (April-June) of 2023-24

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Published on September 28, 2023

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Developments in India’s Balance of Payments during the First Quarter (April-June) of 2023-24

Preliminary data on India’s balance of payments (BoP) for the first quarter (Q1), i.e., April-June 2023-24, are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q1:2023-24

India’s current account deficit (CAD) narrowed to US$ 9.2 billion (1.1 per cent of GDP) in Q1:2023-24 from US$ 17.9 billion (2.1 per cent of GDP) in Q1:2022-23 but it was higher than US$ 1.3 billion (0.2 per cent of GDP) in the preceding quarter.¹
The widening of CAD on a quarter-on-quarter basis was primarily on account of a higher trade deficit coupled with a lower surplus in net services and decline in private transfer receipts.
Net services receipts decreased sequentially, primarily due to a decline in exports of computer, travel and business services, though remained higher on a year-on-year (y-o-y) basis.
Private transfer receipts, mainly representing remittances by Indians employed overseas, moderated to US$ 27.1 billion in Q1:2023-24 from US$ 28.6 billion in Q4:2022-23 but witnessed an increase on a y-o-y basis.
Net outgo on the income account, primarily reflecting payments of investment income, declined to US$ 10.6 billion in Q1:2023-24 from US$ 12.6 billion in Q4:2022-23, though higher than a year ago.
In the financial account, net foreign direct investment decreased to US$ 5.1 billion from US$ 13.4 billion a year ago.
Net foreign portfolio investment recorded inflows of US$ 15.7 billion as against net outflows of US$ 14.6 billion in Q1:2022-23.
Net external commercial borrowings to India recorded an inflow of US$ 5.6 billion in Q1:2023-24 as against an outflow of US$ 2.9 billion a year ago.
Non-resident deposits recorded net inflows of US$ 2.2 billion as compared with US$ 0.3 billion in Q1:2022-23.
There was an accretion of US$ 24.4 billion to the foreign exchange reserves (on a BoP basis) in Q1:2023-24 as compared with US$ 4.6 billion in Q1:2022-23 (Table 1).

Table 1: Major Items of India's Balance of Payments
(US$ billion)
	April-June 2023 P			April-June 2022
	Credit	Debit	Net	Credit	Debit	Net
A. Current Account	221.4	230.6	-9.2	231.0	249.0	-17.9
1. Goods	105.0	161.6	-56.6	122.8	185.9	-63.1
Of which:
POL	19.1	43.3	-24.3	26.9	53.2	-26.3
2. Services	80.6	45.4	35.1	76.1	45.0	31.1
3. Primary Income	8.7	19.3	-10.6	6.5	15.3	-8.9
4. Secondary Income	27.1	4.2	22.9	25.6	2.8	22.9
B. Capital Account and Financial Account	181.8	171.9	9.9	192.8	175.4	17.4
Of which:
Change in Reserves [Increase (-)/Decrease (+)]	0.0	24.4	-24.4	0.0	4.6	-4.6
C. Errors & Omissions (-) (A+B)	0.0	0.7	-0.7	0.5	0.0	0.5
P: Preliminary.
Note: Total of sub-components may not tally with aggregate due to rounding off.