New Delhi, Sep 15 (IANS) An exponential increase in merchandise imports during the first quarter (April-June) of 2017-18 pushed India’s current account deficit (CAD) higher to $14.3 billion, or 2.4 per cent of the GDP, from $0.4 billion reported for the like period of 2016-17.
According to data released by Reserve Bank of India (RBI) on Friday, Q1 CAD was even higher than the fourth quarter 2016-17 deficit of $3.4 billion.
“India’s CAD at $14.3 billion (2.4 per cent of GDP) in Q1 of 2017-18 increased sharply from $0.4 billion (0.1 per cent of GDP) in Q1 of 2016-17, and $3.4 billion (0.6 per cent of GDP) in Q4 of 2016-17,” the RBI said.
“The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit ($41.2 billion) brought about by a larger increase in merchandise imports relative to exports.”
Net services receipts rose by 15.7 per cent on a y-o-y basis owing to a a rise in net earnings from travel, construction and other business services.
During the quarter in consideration, net foreign direct investment (FDI) at $7.2 billion in almost doubled from the level in the same period last year.
During the first quarter there was a significant inflow of net portfolio investment at $12.5 billion, primarily in the debt segment, as compared to $2.1 billion in the same quarter a year ago.
Private transfer receipts, mostly representing remittances by Indians working overseas, at $16.1 billion, increased by 5.3 per cent over the corresponding quarter of last year.
The country’s balance of payments for the quarter in question stood at $11.40 billion, up from $6.969 billion in the same period a year ago.
There was an accretion of $11.4 billion to India’s foreign exchange reserves, as compared to 7 billion in the same quarter last year and $7.3 billion in the fourth quarter of the last fiscal ended March.