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« RBI-Sources of Variation in Foreign Exchange Reserves in... | RBI signs Memorandum of Understanding(MoU) on “Supervisory... » |
Developments in India’s Balance of Payments during the Third Quarter (October-December) of 2016-17 |
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March, 24th 2017 |
Preliminary data on India’s balance of payments (BoP) for the third quarter (Q3) i.e., October-December 2016-17 are presented in Statements I (BPM6 format) and II (old format).
Key Features of India’s BoP in Q3 of 2016-17
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India’s current account deficit (CAD) at US$ 7.9 billion (1.4 per cent of GDP) in Q3 of 2016-17 was higher than US$ 7.1 billion (1.4 per cent of GDP) in Q3 of 2015-16 and US$ 3.4 billion (0.6 per cent of GDP) in the preceding quarter.
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Despite a slightly lower trade deficit on a year-on-year (y-o-y) basis, the CAD widened primarily on account of a decline in net invisibles receipts.
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Net services receipts moderated on a y-o-y basis, primarily owing to the fall in earnings from software, financial services and charges for intellectual property rights.
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Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 15.2 billion, having declined by 3.8 per cent from their level a year ago.
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In the financial account, net foreign direct investment at US$ 9.8 billion in Q3 of 2016-17 was marginally lower than its level a year ago.
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There has been net outflow of portfolio investment to the tune of US$ 11.3 billion as against net inflow of US$ 0.6 billion in Q3 of last year; portfolio outflows occurred in both equity and debt segments.
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Reflecting the redemption of FCNR (B) deposits, non-resident Indian (NRI) deposits declined by US$ 18.5 billion in Q3 of 2016-17 as against an inflow of US$ 1.6 billion a year ago.
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In Q3 of 2016-17, foreign exchange reserves (on BoP basis) declined by US$ 1.2 billion as against an increase of US$ 4.1 billion in Q3 of last year (Table 1).
BoP during April-December 2016
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On a cumulative basis, the CAD narrowed to 0.7 per cent of GDP in April-December 2016 from 1.4 per cent in the corresponding period of 2015-16 on the back of the contraction in the trade deficit.
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India’s trade deficit narrowed to US$ 82.8 billion in April-December 2016 from US$ 105.3 billion in April-December 2015.
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Net invisible receipts were lower, mainly due to moderation in software exports and net private transfers and higher outgo on account of primary income (profit, interest and dividends).
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Net FDI inflows during April-December 2016 (US$ 30.6 billion) rose by 12.3 per cent over the level during the corresponding period of 2015-16.
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Portfolio investment recorded a net outflow of US$ 3.2 billion during April-December 2016 as compared with US$ 3.0 billion a year ago.
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In April-December 2016, there was an accretion of US$ 14.2 billion to the foreign exchange reserves.
Table 1: Major Items of India's Balance of Payments |
(US$ Billion) |
|
October-December 2016 P |
October-December 2015 |
April-December 2016-17 P |
April-December 2015-16 |
|
Credit |
Debit |
Net |
Credit |
Debit |
Net |
Credit |
Debit |
Net |
Credit |
Debit |
Net |
A. Current Account |
130.1 |
138.0 |
-7.9 |
122.6 |
129.7 |
-7.1 |
383.0 |
394.6 |
-11.6 |
376.7 |
398.5 |
-21.8 |
1. Goods |
68.8 |
102.0 |
-33.3 |
64.9 |
98.9 |
-34.0 |
202.8 |
285.5 |
-82.8 |
200.5 |
305.9 |
-105.3 |
Of which: |
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|
POL |
8.2 |
21.7 |
-13.5 |
7.4 |
20.0 |
-12.6 |
22.6 |
61.2 |
-38.6 |
24.4 |
68.3 |
-43.9 |
2. Services |
42.1 |
24.5 |
17.6 |
37.9 |
19.9 |
18.0 |
122.4 |
72.8 |
49.7 |
114.9 |
61.3 |
53.6 |
3. Primary Income |
4.0 |
10.1 |
-6.2 |
3.8 |
10.2 |
-6.4 |
12.0 |
32.3 |
-20.3 |
11.0 |
28.8 |
-17.8 |
4. Secondary Income |
15.3 |
1.4 |
13.9 |
15.9 |
0.7 |
15.3 |
45.8 |
4.0 |
41.8 |
50.3 |
2.6 |
47.7 |
B. Capital Account and Financial Account |
138.7 |
131.3 |
7.4 |
115.1 |
108.3 |
6.8 |
406.8 |
395.1 |
11.8 |
383.6 |
360.6 |
23.0 |
Of which: |
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Change in Reserve (Increase (-)/Decrease (+)) |
1.2 |
|
1.2 |
|
4.1 |
-4.1 |
1.2 |
15.5 |
-14.2 |
0.9 |
15.5 |
-14.6 |
C. Errors & Omissions (-) (A+B) |
0.5 |
|
0.5 |
0.3 |
|
0.3 |
|
0.2 |
-0.2 |
|
1.2 |
-1.2 |
P: Preliminary |
Note: Total of subcomponents may not tally with aggregate due to rounding off. |
Jose J. Kattoor Chief General Manager
Press Release: 2016-2017/2542
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