India recorded a current account surplus in the last quarter of the last financial year due to higher service income. Additionally, the Reserve Bank of India (RBI) on Monday said the overall current account deficit for FY2024 has narrowed due to decline in goods trade deficit.
India’s current account deficit (CAD) declined to 0.7 percent of GDP or $23.2 billion in FY2024 from 2 percent of GDP or $67 billion last year.
“Sequential decline in CAD in Q4:2022-23 mainly due to narrowing in trade deficit with stronger services trade from US$71.3 billion in Q4:2022-23 to US$52.6 billion in Q4:2022-23 Went. Exports the bank said in a release.
There was a net inflow of foreign portfolio investment of $44.1 billion in FY2024, following a net outflow of $5.2 billion in FY2023. In contrast, net FDI inflows fell to $9.8 billion in FY24, compared to $28 billion in FY23.
On a balance of payments basis, India’s foreign exchange reserves increased by $63.7 billion in FY2024.
Overall net invisible receipts increased in FY2014, driven by gains in services and transfers. Net invisibles refers to the balance between the value of exports and imports of intangible goods and services within a country over a specified period.
There was a net foreign portfolio investment (FPI) outflow of $1.7 billion, mainly driven by the equity segment. This is a significant improvement compared to the outflow of $15.2 billion during the same period last year.
