CAD falls to just $300 million

Mumbai: The current account deficit (CAD) narrowed to $0.3 billion ($300 million or 0.1 per cent of GDP) in Q1 of 2016-17, significantly lower than $6.1 billion (1.2 per cent of GDP) in Q1 of 2015-16 primarily on account of a lower trade deficit ($23.8 billion) than in the preceding quarter ($24.8 billion).

India’s balance of payments (BoP) for the first quarter (Q1) i.e., April-June, 2016-17 released by the Reserve Bank of India showed merchandise imports declined sharply by 11.5 per cent vis-a-vis merchandise exports which declined by 2.1 per cent.

Remittances by Indians employed overseas, declined to $15.2 billion, against the preceding quarter as well as from a year ago while net foreign direct investment moderated to $4.1 billion from $10.0 billion in Q1 of 2015-16 and $8.8 billion in the preceding quarter i.e., Q4 of 2015-16.

Non-Resident Indian (NRI) deposits at $1.4 billion moderated in from their level in the preceding quarter while earnings decreased from travel, financial services and other business services.

Portfolio investment, recorded a net inflow of $ 2.1 billion as against a marginal outflow in the corresponding period of last year and an outflow of $ 1.5 billion in the preceding quarter, primarily reflecting net inflow in the equity component.

Repayments under external commercial borrowings (ECB) also saw a net outflow under loans to India as against net borrowings in the same period last year.