Preliminary data on India’s balance of payments (BoP) for the fourth quarter (Q4), i.e., January-March 2019-20, are presented in Statements I (BPM6 format) and II (old format). Key Features of India’s BoP in Q4 of 2019-20 -
India’s current account balance (CAB) recorded a marginal surplus of US$ 0.6 billion (0.1 per cent of GDP) in Q4 of 2019-20 as against a deficit of US$ 4.6 billion (0.7 per cent of GDP) in Q4 of 2018-19 and US$ 2.6 billion (0.4 per cent of GDP) in the preceding quarter, i.e., Q3 of 2019-20. -
The surplus in the current account in Q4 of 2019-20 was primarily on account of a lower trade deficit at US$ 35.0 billion and a sharp rise in net invisible receipts at US$ 35.6 billion as compared with the corresponding period of last year. -
Net services receipts increased on the back of a rise in net earnings from computer and travel services on a year-on-year basis. -
Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to US$ 20.6 billion, up by 14.8 per cent from their level a year ago. -
Net outgo from the primary income account, primarily reflecting net overseas investment income payments, decreased to US$ 4.8 billion from US$ 6.9 billion a year ago. -
In the financial account, net foreign direct investment at US$ 12.0 billion was higher than US$ 6.4 billion in Q4 of 2018-19. -
Foreign portfolio investment (FPI) declined by US$ 13.7 billion as against an increase of US$ 9.4 billion in Q4 of 2018-19 – on account of net sales in both the debt and equity markets. -
Net inflow on account of external commercial borrowings to India was US$ 9.4 billion in Q4 of 2019-20 as compared with US$ 7.2 billion a year ago. -
Owing to COVID-19 related uncertainty, net inflows under ‘other capital’ surged during the quarter, reflecting inter alia the FPIs’ outstanding balances with custodian banks and pending issuance of shares by FDI companies. -
There was an accretion of US$ 18.8 billion to the foreign exchange reserves (on a BoP basis) as compared with an accretion of US$ 14.2 billion in Q4 of 2018-19 (Table 1). BoP during 2019-20 -
The CAD narrowed to 0.9 per cent of GDP in 2019-20 from 2.1 per cent in 2018-19 on the back of the trade deficit which shrank to US$ 157.5 billion in 2019-20 from US$ 180.3 billion in 2018-19. -
Net invisible receipts were higher in 2019-20 mainly due to increase in net services earnings and private transfer receipts. -
Net FDI inflows at US$ 43.0 billion in 2019-20 were higher than US$ 30.7 billion in 2018-19. -
Portfolio investment increased by US$ 1.4 billion in 2019-20 as against an outflow of US$ 2.4 billion a year ago. -
In 2019-20, there was an accretion of US$ 59.5 billion to foreign exchange reserves (on a BoP basis). | Table 1: Major Items of India's Balance of Payments | | (US$ billion) | | | January-March 2020 P | January-March 2019 | 2019-20 P | 2018-19 | | | Credit | Debit | Net | Credit | Debit | Net | Credit | Debit | Net | Credit | Debit | Net | | A. Current Account | 157.1 | 156.5 | 0.6 | 165.2 | 169.8 | -4.6 | 642.1 | 666.7 | -24.6 | 643.7 | 700.9 | -57.2 | | 1. Goods | 76.5 | 111.6 | -35.0 | 87.4 | 122.6 | -35.2 | 320.4 | 477.9 | -157.5 | 337.2 | 517.5 | -180.3 | | Of which: | | | | | | | | | | | | | | POL | 9.2 | 33.7 | -24.6 | 9.9 | 32.4 | -22.5 | 42.8 | 129.4 | -86.6 | 46.5 | 140.9 | -94.4 | | 2. Services | 53.1 | 31.0 | 22.0 | 54.6 | 33.3 | 21.3 | 213.2 | 128.3 | 84.9 | 208.0 | 126.1 | 81.9 | | 3. Primary Income | 7.0 | 11.8 | -4.8 | 5.2 | 12.1 | -6.9 | 25.2 | 52.4 | -27.3 | 21.8 | 50.7 | -28.9 | | 4. Secondary Income | 20.6 | 2.2 | 18.4 | 18.0 | 1.8 | 16.2 | 83.4 | 8.0 | 75.3 | 76.6 | 6.6 | 70.0 | | B. Capital Account and Financial Account | 176.3 | 177.8 | -1.5 | 159.0 | 153.9 | 5.1 | 610.0 | 586.5 | 23.6 | 560.0 | 502.3 | 57.7 | | Of which: | | | | | | | | | | | | | | Change in Reserves (Increase (-)/Decrease (+)) | 0.0 | 18.8 | -18.8 | 0.0 | 14.2 | -14.2 | 0.0 | 59.5 | -59.5 | 17.5 | 14.2 | 3.3 | | C. Errors & Omissions (-) (A+B) | 0.9 | | 0.9 | | 0.4 | -0.4 | 1.0 | | 1.0 | | 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: 2019-2020/2568 | |