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Date : Dec 22, 2015
Developments in India’s Balance of Payments during the Second Quarter (July-September) of 2015-16

Preliminary data on India’s balance of payments (BoP) for the second quarter (Q2) i.e., July-September 2015-16 are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q2 of 2015-16

  • India’s current account deficit (CAD) at US$ 8.2 billion (1.6 per cent of GDP) in Q2 of 2015-16 was lower than US$ 10.9 billion (2.2 per cent of GDP) in Q2 of 2014-15 but increased from US$ 6.1 billion (1.2 per cent of GDP) in the preceding quarter (Table 1).

  • The contraction in CAD was primarily on account of lower trade deficit (US$ 37.4 billion) as compared with US$ 39.7 billion in Q2 of last year though it was higher than the level in the preceding quarter (US$ 34.2 billion).

  • Although net services receipts moderated marginally on a y-o-y basis largely due to fall in export receipts in transport, insurance and pension services, there has been some improvement over the preceding quarter.

  • Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 16.5 billion, a marginal decline from their level in the preceding as well as the corresponding quarter.

  • After a sharp pick up in Q1, net foreign direct investment moderated in Q2 of 2015-16.

  • There has been net outflow of portfolio investment to the tune of US$ 6.5 billion as against net inflow of US$ 9.8 billion in Q2 of last year; outflow was more evident in the equity segment.

  • Non-resident Indian (NRI) deposits, however, increased by 4.0 per cent in Q2 of 2015-16 over the level in Q2 of last year.

  • Foreign exchange reserves (on BoP basis) decreased by US$ 0.9 billion in Q2 of 2015-16.

BoP during April-September 2015 (H1 of 2015-16)

  • On a cumulative basis, the CAD narrowed to 1.4 per cent of GDP in H1 of 2015-16 from 1.8 per cent in H1 of 2014-15 on the back of contraction in the trade deficit and a marginal improvement in net invisibles.

  • India’s trade deficit narrowed to US$ 71.6 billion in H1 of 2015-16 from US$ 74.7 billion in H1 of 2014-15.

  • Net invisible receipts were marginally higher with the moderation in net services earnings and private transfer receipts being offset by a smaller net outflow of primary income (profit interest and dividends).

  • Net FDI inflows during H1 of 2015-16 rose by more than 10 per cent over the level during the corresponding period of the previous year.

  • Portfolio investment, however, recorded a net outflow US$ 9.1 billion during H1 as against a net inflow of US$ 22.2 billion last year.

In H1 of 2015-16, there was an accretion of US$ 10.6 billion to foreign exchange reserves (on a BoP basis) as compared with US$ 18.1 billion in H1 of 2014-15.

Table 1: Major Items of India's Balance of Payments
(US$ Billion)
  July-Sept 2015 P Jul-Sept 2014 PR Apr-Sept 2015-16 P Apr-Sept 2014-15 PR
Credit Debit Net Credit Debit Net Credit Debit Net Credit Debit Net
A. Current Account 127.3 135.5 -8.2 142.5 153.4 -10.9 254.2 268.6 -14.3 282.6 301.0 -18.4
1. Goods 67.6 105.0 -37.4 83.1 122.7 -39.7 135.6 207.2 -71.6 164.6 239.4 -74.7
Of which:                        
POL 8.4 23.5 -15.1 16.8 42.0 -25.1 16.7 48.2 -31.5 33.6 82.4 -48.7
2. Services 38.8 20.8 18.0 38.4 19.4 18.9 77.0 41.7 35.3 76.5 40.0 36.5
3. Primary Income 3.9 8.9 -5.0 3.5 10.1 -6.6 7.2 17.8 -10.5 6.4 19.4 -13.0
4. Secondary Income 17.1 0.8 16.3 17.5 1.1 16.4 34.3 1.9 32.4 35.1 2.2 32.9
B. Capital Account and Financial Account 128.3 120.3 8.1 133.6 122.9 10.7 269.7 255.0 14.8 278.3 260.1 18.3
Of which:                        
Change in Reserve (Increase (-)/Decrease (+)) 0.9 0.0 0.9 0.0 6.9 -6.9 0.0 10.6 -10.6 0.0 18.1 -18.1
C. Errors & Omissions (-) (A+B) 0.1 0.0 0.1 0.3 0.0 0.3 0.0 0.4 -0.4 0.1 0.0 0.1
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 : 2015-2016/1478


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