Preliminary data on India’s balance of payments (BoP) for the second quarter (Q2), i.e., July-September 2020-21, are presented in Statements I (BPM6 format) and II (old format). Key Features of India’s BoP in Q2 of 2020-21 -
India’s current account surplus moderated to US$ 15.5 billion (2.4 per cent of GDP) in Q2 of 2020-21 from US$ 19.2 billion (3.8 per cent of GDP) in Q1 of 2020-21; a deficit of US$ 7.6 billion (1.1 per cent of GDP) was recorded a year ago [i.e. Q2 of 2019-20]. -
The narrowing of the current account surplus in Q2 of 2020-21 was on account of a rise in the merchandise trade deficit to US$ 14.8 billion from US$ 10.8 billion in the preceding quarter. -
Net services receipts increased both sequentially and on a year-on-year basis, primarily on the back of higher net earnings from computer services. -
Private transfer receipts, mainly representing remittances by Indians employed overseas, declined on a y-o-y basis but improved sequentially by 12 per cent to US$ 20.4 billion in Q2 2020-21. -
Net outgo from the primary income account, primarily reflecting net overseas investment income payments, increased to US$ 9.3 billion from US$ 8.8 billion a year ago. -
In the financial account, net foreign direct investment recorded robust inflow of US$ 24.6 billion as compared with US$ 7.3 billion in Q2 of 2019-20. -
Net foreign portfolio investment was US$ 7.0 billion as compared with US$ 2.5 billion in Q2 of 2019-20, largely reflecting net purchases in the equity market. -
With repayments exceeding fresh disbursals, external commercial borrowings to India recorded net outflow of US$ 4.1 billion in Q2 of 2020-21 as against an inflow of US$ 3.1 billion a year ago. -
Net accretions to non-resident deposits moderated to US$ 1.9 billion from US$ 2.3 billion in Q2 of 2019-20. -
There was an accretion of US$ 31.6 billion to the foreign exchange reserves (on a BoP basis) as compared with that of US$ 5.1 billion in Q2 of 2019-20 (Table 1). BoP during April-September 2020-21 (H1 of 2020-21) -
India recorded a current account surplus of 3.1 per cent of GDP in H1of 2020-21 as against a deficit of 1.6 per cent in H1 of 2019-20 on the back of a sharp contraction in the trade deficit. -
Net invisible receipts were lower in H1 of 2020-21, mainly due to decline in net private transfer receipts. -
Net FDI inflows at US$ 23.8 billion in H1of 2020-21 were higher than US$ 21.3 billion in H1of 2019-20. -
Portfolio investment recorded a net inflow of US$ 7.6 billion in H1of 2020-21, almost at the same level as a year ago. -
In H1 of 2020-21, there was an accretion of US$ 51.4 billion to the foreign exchange reserves (on a BoP basis). | Table 1: Major Items of India's Balance of Payments | | (US$ billion) | | | July-September 2020 P | July-September 2019 | April-September 2020-21 P | April-September 2019-20 | | | Credit | Debit | Net | Credit | Debit | Net | Credit | Debit | Net | Credit | Debit | Net | | A. Current Account | 151.0 | 135.4 | 15.5 | 161.6 | 169.1 | -7.6 | 273.4 | 238.7 | 34.8 | 322.2 | 344.8 | -22.5 | | 1. Goods | 75.6 | 90.4 | -14.8 | 80.0 | 119.6 | -39.6 | 127.9 | 153.5 | -25.6 | 162.7 | 249.1 | -86.4 | | Of which: | | | | | | | | | | | | | | POL | 7.3 | 18.8 | -11.5 | 10.1 | 29.8 | -19.7 | 12.1 | 32.0 | -19.9 | 21.2 | 65.2 | -44.0 | | 2. Services | 49.9 | 28.7 | 21.2 | 52.8 | 31.8 | 20.9 | 96.7 | 55.0 | 41.7 | 105.0 | 64.0 | 41.0 | | 3. Primary Income | 5.0 | 14.3 | -9.3 | 6.8 | 15.7 | -8.8 | 10.1 | 26.9 | -16.8 | 12.7 | 27.7 | -15.1 | | 4. Secondary Income | 20.4 | 2.0 | 18.4 | 22.0 | 2.0 | 20.0 | 38.6 | 3.2 | 35.4 | 41.9 | 4.0 | 38.0 | | B. Capital Account and Financial Account | 152.7 | 168.8 | -16.2 | 142.2 | 133.8 | 8.4 | 280.5 | 315.5 | -35.0 | 280.5 | 257.5 | 23.0 | | Of which: | | | | | | | | | | | | | | Change in Reserves (Increase (-)/Decrease (+)) | 0.0 | 31.6 | -31.6 | 0.0 | 5.1 | -5.1 | 0.0 | 51.4 | -51.4 | 0.0 | 19.1 | -19.1 | | C. Errors & Omissions (-) (A+B) | 0.6 | | 0.6 | | 0.9 | -0.9 | 0.2 | | 0.2 | | 0.5 | -0.5 | | P: Preliminary | | Note: Total of subcomponents may not tally with aggregate due to rounding off. | (Yogesh Dayal)
Chief General Manager Press Release: 2020-2021/853 | |