The country’s current account deficit (CAD) moderated marginally to $11.2 billion, or 1.2 per cent of gross domestic product (GDP), in July-September 2024 quarter from $11.3 billion, or 1.3 per cent of GDP, in the same period of the previous fiscal.
During April-September period (H1 FY2024-25), the current account deficit was $21.4 billion (1.2 per cent of GDP) as compared with $20.2 billion (1.2 per cent of GDP) in H1 of 2023-24, the Reserve Bank of India (RBI) data showed on Friday.
The current account deficit is the difference between exports and imports of goods and services. It is a key indicator of the country’s external sector.
In the second quarter of the current fiscal, merchandise trade deficit increased to $75.3 billion from $64.5 billion in the same period of FY2023-24.
Net services receipts rose to $44.5 billion in Q2 FY2024-25 from $39.9 billion a year ago. Services exports have increased on a year-on-year (y-o-y) basis across major categories such as computer services, business services, travel services and transportation services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to $31.9 billion in the second quarter of the current fiscal from $28.1 billion in the year-ago period.
Net foreign direct investment recorded an outflow of $2.2 billion in the reporting quarter as compared with an outflow of $0.8 billion in the corresponding period of 2023-24.
Net inflows under foreign portfolio investment (FPI) surged to $19.9 billion in Q2 2024-25 from US$ 4.9 billion in Q2:2023-24. In April-September 2024, net FPI inflows stood at $20.8 billion as compared to net inflows of $20.7 billion a year ago.
Non-resident deposits (NRI deposits) recorded net inflows of $6.2 billion in the second quarter of the current fiscal, higher than $3.2 billion a year ago, the RBI data showed.
In Q2 FY2024-25, there was an accretion of $18.6 billion to the foreign exchange reserves (on a balance of payment basis), higher than $2.5 billion in Q2 FY 2023-24.
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