Preliminary data on India’s balance of payments (BoP) for the Fourth quarter (Q4) i.e., January-March of the financial year 2014-15 are presented in Statements I (BPM6 format) and II (old format). Key Features of India’s BoP in Q4 2014-15 -
On a quarter-over-quarter (q-o-q) basis, India’s current account deficit (CAD) narrowed sharply to US$ 1.3 billion (0.2 per cent of GDP) in Q4 of 2014-15 from US$ 8.3 billion (1.6 per cent of GDP) in Q3; on a year-on-year (y-o-y) basis, however, the CAD was a shade higher (US$ 1.2 billion or 0.2 per cent of GDP in Q4 of 2013-14). -
The merchandise trade deficit (US$ 31.7 billion during Q4 2014-15) contracted sharply on a q-o-q basis on account of a larger decline in merchandise imports (13.4 per cent) than in merchandise exports (10.4 per cent); however, in terms of y-o-y changes, the trade deficit in Q4 2014-15 widened marginally as exports registered a larger decline (15.4 per cent), than imports (10.4 per cent). -
The reduction in the CAD in Q4 2014-15 was primarily on account of lower trade deficit as net earnings through services and primary income (profit, dividend & interest) witnessed a decline in q-o-q terms albeit secondary income recorded a marginal increase of 0.4 per cent. -
Gross private transfer receipts, representing remittances by Indians employed overseas amounted to US$ 17.5, witnessing a marginal increase of 0.4 per cent on q-o-q basis and an increase of 1.2 per cent from the level a year ago. -
In the financial account, net inflows of foreign direct and portfolio investment were higher on a q-o-q basis, though net loans availed by banks witnessed an outflow US$ 3.5 billion mainly on account of increase in balances of foreign currency assets held abroad by banks. -
During Q4 of 2014-15, on a BoP basis, there was highest ever net accretion of US$ 30.1 billion to India’s foreign exchange reserves in a single quarter; it was more than double the accretion in the preceding quarter and almost four times of the reserves accrued in Q4 of 2013-14 (Table 1) signifying record increase in capital inflows and dip in current account deficit. BoP during April-March 2015 -
On a cumulative basis, the overall BoP during 2014-15 showed improvement over the preceding year. Lower CAD, on the back of contraction in trade deficit and marginal improvement in the net invisible earnings, along with a sizable increase in net financial flows enabled a large build-up of reserves. -
India’s trade deficit narrowed to US$ 144.2 billion in 2014-15 from US$ 147.6 billion in 2013-14. With modest increase in invisibles supported by some improvement in net services receipts, the CAD tracked the trade deficit and shrank to US$ 27.5 billion in 2014-15 (1.3 per cent of GDP) from US$ 32.4 billion (1.7 per cent of GDP) a year ago. -
Net inflows under the capital and financial account (excluding change in foreign exchange reserves) rose to US$ 89.5 billion during 2014-15 from US$ 48.7 billion in the previous year. -
There was an accretion to India’s foreign exchange reserves to the tune of US$ 61.4 billion in 2014-15 as compared with US$ 15.5 billion in 2013-14. -
At the end of March 2015, the level of foreign exchange reserves stood at US$ 341.6 billion. Table 1: Major Items of India's Balance of Payments | (US$ Billion) | | Jan-Mar 2015 (P) | Jan-Mar 2014 (PR) | Apr-Mar 2014-15 (P) | Apr-Mar 2013-14 (PR) | Credit | Debit | Net | Credit | Debit | Net | Credit | Debit | Net | Credit | Debit | Net | A. Current Account | 131.4 | 132.7 | -1.3 | 144.4 | 145.6 | -1.2 | 553.7 | 581.2 | -27.5 | 551.4 | 583.7 | -32.4 | 1. Goods | 70.8 | 102.5 | -31.7 | 83.7 | 114.3 | -30.7 | 316.7 | 460.9 | -144.2 | 318.6 | 466.2 | -147.6 | Of which: | | | | | | | | | | | | | POL | 7.7 | 21.8 | -14.1 | 15.1 | 42.6 | -27.4 | 55.2 | 138.3 | -83.1 | 63.2 | 164.8 | -101.6 | 2. Services | 39.8 | 20.4 | 19.4 | 40.6 | 21.0 | 19.6 | 155.4 | 79.8 | 75.7 | 151.5 | 78.5 | 73.0 | 3. Primary Income | 3.2 | 8.8 | -5.6 | 2.8 | 9.2 | -6.4 | 11.5 | 36.5 | -25.0 | 11.4 | 34.4 | -23.0 | 4. Secondary Income | 17.5 | 0.9 | 16.6 | 17.3 | 1.0 | 16.3 | 70.0 | 4.0 | 66.0 | 69.9 | 4.6 | 65.3 | B. Capital Account and Financial Account | 149.2 | 148.9 | 0.3 | 127.1 | 125.1 | 2.0 | 548.4 | 520.3 | 28.1 | 523.2 | 490.0 | 33.2 | Of which: | | | | | | | | | | | | | Change in Reserve (Increase (-)/Decrease (+)) | 0.0 | 30.1 | -30.1 | 0.0 | 7.1 | -7.1 | 0.0 | 61.4 | -61.4 | 0.0 | 15.5 | -15.5 | C. Errors & Omissions (-) (A+B) | 1.0 | | 1.0 | | 0.7 | -0.7 | | 0.6 | -0.6 | | 0.9 | -0.9 | P: Preliminary; PR: Partially Revised | Note: Total of subcomponents may not tally with aggregate due to rounding off. | Alpana Killawala Principal Chief General Manager Press Release : 2014-2015/2616 | |