India’s current account deficit (CAD) decreases to $10.5 billion in the third quarter of 2023-24, compared to $11.4 billion in the previous quarter and $16.8 billion a year ago, according to Reserve Bank of India (RBI) data.
CAD for October-December 2023 stands at 1.2% of India’s GDP, down from 1.3% in the previous quarter and 2.0% in the same period of the previous year.
The merchandise trade deficit slightly increases to $71.6 billion from $71.3 billion in the third quarter of 2022-23.
Services exports rise by 5.2% year-on-year, driven by software, business, and travel services, contributing to a sequential and year-on-year increase in net services receipts, mitigating the current account deficit.
Foreign direct investment records a net inflow of $4.2 billion, up from $2.0 billion in Q3 FY2022-23, while foreign portfolio investment sees a net inflow of $12.0 billion, compared to $4.6 billion in the same period last year.
However, net FDI inflow during April-December 2023 decreases to $8.5 billion from $21.6 billion in the corresponding period of the previous year.
Also Read : India’s Foreign Exchange Reserves Reach Record High
Foreign exchange reserves witness an accretion of $6.0 billion in the third quarter, lower than $11.1 billion in the same period last year, according to RBI data.
External commercial borrowings to India record a net outflow of $2.6 billion in Q3 FY24, while non-resident deposits register a higher net inflow of $3.9 billion compared to $2.6 billion a year ago.
The data reflects ongoing trends in India’s external sector, with efforts to manage the current account deficit and attract foreign investment amid global economic dynamics.
