Preliminary data on India’s balance of payments (BoP) for the first quarter (Q1) i.e., April-June, 2016-17 are presented in Statements I (BPM6 format) and II (old format). Key Features -
The current account deficit (CAD) narrowed to US$ 0.3 billion (0.1 per cent of GDP) in Q1 of 2016-17, significantly lower than US$ 6.1 billion (1.2 per cent of GDP) in Q1 of 2015-16 (Table 1). -
The contraction in the CAD was primarily on account of a lower trade deficit (US$ 23.8 billion) than in Q1 of last year (US$ 34.2 billion) and in the preceding quarter (US$ 24.8 billion). -
On a BoP basis, merchandise imports declined sharply (by 11.5 per cent) vis-à-vis merchandise exports (which declined by 2.1 per cent), leading to a lower trade deficit in Q1 of 2016-17. -
Net services receipts declined on a y-o-y basis, largely due to a fall in net earnings on account of travel, financial services and other business services. -
Net payment on account of primary income (dividend, interest and profit) increased marginally in Q1 of 2016-17 from its level a year ago. -
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 15.2 billion, declining from their level in the preceding quarter as well as from a year ago. -
Net foreign direct investment moderated to US$ 4.1 billion in Q1 of 2016-17 from US$ 10.0 billion in Q1 of 2015-16 and US$ 8.8 billion in the preceding quarter i.e., Q4 of 2015-16. -
On the other hand, portfolio investment, recorded a net inflow of US$ 2.1 billion in Q1 of 2016-17 as against a marginal outflow in the corresponding period of last year and an outflow of US$ 1.5 billion in the preceding quarter, primarily reflecting net inflow in the equity component. -
Accretion to non-resident Indian (NRI) deposits at US$ 1.4 billion moderated in Q1 of 2016-17 from their level in Q1 last year as well as in the preceding quarter. -
Higher repayments under external commercial borrowings led to a net outflow under loans to India in Q1 of 2016-17 as against net borrowings in the same period last year. -
Foreign exchange reserves (on a BoP basis) increased by US$ 7.0 billion in Q1 of 2016-17 as compared with an accretion of US$ 11.4 billion in Q1 of 2015-16 and US$ 3.3 billion in the preceding quarter. | Table 1: Major Items of India's Balance of Payments | | (US$ Billion) | | | Apr-Jun 2016 (P) | Apr-Jun 2015 (PR) | | Credit | Debit | Net | Credit | Debit | Net | | A. Current Account | 125.2 | 125.5 | -0.3 | 126.9 | 133.0 | -6.1 | | 1. Goods | 66.6 | 90.5 | -23.8 | 68.0 | 102.2 | -34.2 | | Of which: | | | | | | | | POL | 7.0 | 19.0 | -12.0 | 8.3 | 24.7 | -16.4 | | 2. Services | 39.5 | 23.8 | 15.8 | 38.3 | 20.5 | 17.8 | | 3. Primary Income | 3.8 | 10.0 | -6.2 | 3.3 | 9.2 | -5.9 | | 4. Secondary Income | 15.3 | 1.3 | 14.0 | 17.3 | 1.1 | 16.2 | | B. Capital Account and Financial Account | 129.2 | 129.0 | 0.1 | 141.1 | 133.9 | 7.2 | | Of which: | | | | | | | | Change in Reserve (Increase (-)/Decrease (+)) | 0.0 | 7.0 | -7.0 | 0.0 | 11.4 | -11.4 | | C. Errors & Omissions (-) (A+B) | 0.2 | 0.0 | 0.2 | 0.0 | 1.1 | -1.1 | | P: Preliminary; PR: Partially Revised | | Note: Total of subcomponents may not tally with aggregate due to rounding off. | Alpana Killawala
Principal Adviser Press Release : 2016-2017/727 | |