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Date : Dec 31, 2021
Developments in India’s Balance of Payments during the Second Quarter (July-September) of 2021-22 (Revised)

Preliminary data on India’s balance of payments (BoP) for the second quarter (Q2), i.e., July-September 2021-22, are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q2:2021-22

  • India’s current account balance recorded a deficit of US$ 9.6 billion (1.3 per cent of GDP) in Q2:2021-22 as against a surplus of US$ 6.6 billion (0.9 per cent of GDP) in Q1:2021-22 and US$ 15.3 billion (2.4 per cent of GDP) a year ago [i.e., Q2:2020-21].

  • The deficit in the current account in Q2:2021-22 was mainly due to widening of trade deficit to US$ 44.4 billion from US$ 30.7 billion in the preceding quarter and an increase in net outgo of investment income.

  • Net services receipts decreased marginally over the previous quarter but increased on a year-on-year (y-o-y) basis, on the back of robust performance of the exports of computer and business services.

  • Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 21.1 billion, an increase of 3.7 per cent from their level a year ago.

  • Net outgo from the primary income account, mainly reflecting net overseas investment income payments, increased sequentially as well as on a y-o-y basis.

  • In the financial account, net foreign direct investment recorded an inflow of US$ 9.5 billion, lower than US$ 24.4 billion a year ago.

  • Net foreign portfolio investment was US$ 3.9 billion as compared with US$ 7.0 billion in Q2:2020-21.

  • Net external commercial borrowings to India recorded inflow of US$ 4.1 billion in Q2:2021-22 as against an outflow of US$ 3.7 billion a year ago.

  • Non-resident deposits recorded net outflow of US$ 0.8 billion as against an inflow of US$ 1.9 billion in Q2:2020-21.

  • There was an accretion of US$ 31.2 billion (on a BoP basis) in Q2:2021-22 which also included SDR allocation of US$ 17.86 billion by the International Monetary Fund on August 23, 2021 (Table 1).

BoP During April-September 2021 (H1:2021-22)

  • India recorded a current account deficit of 0.2 per cent of GDP in H1:2021-22 as against a surplus of 3.0 per cent in H1:2020-21 on the back of a sharp increase in the trade deficit.

  • Net invisible receipts were higher in H1:2021-22, on account of higher net receipts of services and private transfers.

  • Net FDI inflows at US$ 21.2 billion in H1:2021-22 were lower than US$ 23.9 billion in H1:2020-21.

  • Portfolio investment recorded a net inflow of US$ 4.3 billion in H1:2021-22 as compared with US$ 7.6 billion a year ago.

  • In H1:2021-22, there was an accretion of US$ 63.1 billion to the foreign exchange reserves (on a BoP basis).

Table 1: Major Items of India's Balance of Payments
(US$ Billion)
  July-September 2021 P July-September 2020 April-September 2021 P April-September 2020
  Credit Debit Net Credit Debit Net Credit Debit Net Credit Debit Net
A. Current Account 194.3 203.9 -9.6 150.8 135.5 15.3 374.3 377.3 -3.0 273.2 238.8 34.4
1. Goods 104.8 149.3 -44.4 75.6 90.4 -14.8 202.3 277.4 -75.1 127.8 153.6 -25.8
  Of which:                        
         POL 15.7 39.2 -23.5 7.3 18.8 -11.5 28.6 70.2 -41.6 12.1 32.0 -19.9
2. Services 61.4 35.8 25.6 49.8 28.7 21.1 117.6 66.2 51.4 96.7 54.9 41.8
3. Primary Income 6.9 16.5 -9.7 5.0 14.4 -9.4 12.3 29.5 -17.2 10.0 27.1 -17.1
4. Secondary Income 21.2 2.2 18.9 20.4 2.0 18.4 42.1 4.2 37.9 38.6 3.2 35.4
B. Capital Account and Financial Account 209.6 200.7 8.8 145.0 160.7 -15.7 365.3 362.8 2.5 265.2 299.3 -34.1
  Of which:                        
         Change in Reserves [Increase (-)/Decrease (+)] 0.0 31.2 -31.2 0.0 31.6 -31.6 0.0 63.1 -63.1 0.0 51.4 -51.4
C. Errors & Omissions (-) (A+B) 0.7   0.7 0.4   0.4 0.5   0.5   0.2 -0.2
P: Preliminary
Note: Total of subcomponents may not tally with aggregate due to rounding off.

(Yogesh Dayal)    
Chief General Manager

Press Release: 2021-2022/1460


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