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Developments in Indias Balance of Payments during the Fourth Quarter (January-March) of 2015-16
June, 18th 2016

Preliminary data on India’s balance of payments (BoP) for the fourth quarter (Q4) i.e., January-March 2015-16 are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q4 of 2015-16

  • India’s current account deficit (CAD) narrowed sharply to US$ 0.3 billion (0.1 per cent of GDP) in Q4 of 2015-16, significantly lower than US$ 7.1 billion (1.3 per cent of GDP) in Q3 of 2015-16 and marginally lower than US$ 0.7 billion (0.1 per cent of GDP) in Q4 of 2014-15 (Table 1).

  • The contraction in CAD was primarily on account of a lower trade deficit (US$ 24.8 billion) than in Q4 of last year (US$ 31.6 billion) and US$ 34.0 billion in the preceding quarter.

  •  Net services receipts declined on a y-o-y basis largely due to fall in exports of transport, financial services and telecommunication, computer and information services.

  • Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 15.7 billion, a decline from their level in the preceding quarter as well as from a year ago.

  • Net foreign direct investment moderated to US$ 8.8 billion in Q4 of 2015-16 from US$ 9.3 billion in Q4 of 2014-15.

  • Portfolio investment recorded a net outflow of US$ 1.5 billion in Q4 of 2015-16 as against a net inflow of US$ 12.5 billion in the corresponding period of last year; primarily reflecting net outflow in the debt segment.

  • Non-resident Indian (NRI) deposits, however, increased in Q4 of 2015-16 over their level in Q4 last year as well as the preceding quarter.

  • Foreign exchange reserves (on a BoP basis) increased by US$ 3.3 billion in Q4 of 2015-16.

BoP during April-March 2015-16

  • The CAD narrowed to 1.1 per cent of GDP in 2015-16 from 1.3 per cent in 2014-15, on the back of contraction in the trade deficit.

  • India’s trade deficit narrowed to US$ 130.1 billion in 2015-16 from US$ 144.9 billion in 2014-15.

  • Net invisible receipts declined in 2015-16, primarily reflecting moderation in both net services earnings and private transfer receipts.

  • Net FDI inflows during 2015-16 (US$ 36.0 billion) rose sharply by 15.3 per cent over the level in 2014-15.

  • Portfolio investment, however, recorded a net outflow US$ 4.5 billion in 2015-16 as against a net inflow of US$ 40.9 billion last year.

  • In 2015-16, there was an accretion of US$ 17.9 billion to foreign exchange reserves (on a BoP basis) as compared with US$ 61.4 billion in 2014-15.

Table 1: Major Items of India's Balance of Payments
(US$ Billion)
  January-March 2016 P January-March 2015 PR April-March 2015-16 P April-March 2014-15 PR
Credit Debit Net Credit Debit Net Credit Debit Net Credit Debit Net
A. Current Account 124.7 125.0 -0.3 134.2 134.9 -0.7 501.4 523.5 -22.1 558.2 585.0 -26.8
1. Goods 65.8 90.6 -24.8 71.8 103.4 -31.6 266.4 396.4 -130.1 316.5 461.5 -144.9
      Of which:                        
            POL 6.1 14.6 -8.5 8.2 21.8 -13.5 30.4 82.9 -52.4 56.8 138.3 -81.5
2. Services 39.4 23.3 16.1 41.4 21.3 20.0 154.3 84.6 69.7 158.1 81.6 76.5
3. Primary Income 3.7 10.3 -6.6 3.5 9.1 -5.6 14.7 39.1 -24.4 13.4 37.5 -24.1
4. Secondary Income 15.7 0.7 15.0 17.5 1.1 16.4 66.0 3.3 62.7 70.1 4.4 65.8
B. Capital Account and Financial Account 127.3 127.2 0.2 149.4 149.5 -0.1 510.9 487.8 23.2 550.9 523.1 27.8
      Of which:                        
Change in Reserve (Increase (-)/Decrease (+)) 0.0 3.3 -3.3 0.0 30.1 -30.1 0.9 18.8 -17.9 0.0 61.4 -61.4
C. Errors & Omissions (-) (A+B) 0.2 0.0 0.2 0.8 0.0 0.8 0.4 1.5 -1.1 1.1 2.1 -1.0
P: Preliminary PR: Partially Revised          
Note: Total of sub-components may not tally with aggregate due to rounding off.

Ajit Prasad
Assistant Adviser

Press Release : 2015-2016/2925

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