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Developments in India’s Balance of Payments during the Fourth Quarter (January-March) of 2016-17 |
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June, 17th 2017 |
Preliminary data on India’s balance of payments (BoP) for the fourth quarter (Q4) i.e., January-March 2016-17 are presented in Statements I (BPM6 format) and II (old format).
Key Features of India’s BoP in Q4 of 2016-17
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India’s current account deficit (CAD) at US$ 3.4 billion (0.6 per cent of GDP) in Q4 of 2016-17 was higher than US$ 0.3 billion (0.1 per cent of GDP) in Q4 of 2015-16 but narrowed from US$ 8.0 billion (1.4 per cent of GDP) in the preceding quarter.
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The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit (US$ 29.7 billion) brought about by a larger increase in merchandise imports relative to exports.
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Net services receipts increased on a y-o-y basis on the back of a rise in net earnings from travel, transport, construction and other business services.
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Private transfer receipts, mainly representing remittances by Indians employed overseas, at US$ 15.7 billion remained almost at the same level as in the preceding year.
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In the financial account, net foreign direct investment at US$ 5.0 billion in Q4 of 2016-17 moderated from its level a year ago.
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Net portfolio investment, however, recorded substantial inflow of US$ 10.8 billion in Q4 of 2016-17 in both equity and debt segment, as against net outflow of US$ 1.5 billion in Q4 last year.
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Net receipts on account of non-resident deposits amounted to US$ 2.7 billion in Q4 of 2016-17, lower than US$ 4.4 billion a year ago.
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In Q4 of 2016-17, there was an accretion of foreign exchange reserves (on BoP basis) to the tune of US$ 7.3 billion as compared with an increase of US$ 3.3 billion in Q4 of last year (Table 1).
BoP during 2016-17
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On a cumulative basis, the CAD narrowed to 0.7 per cent of GDP in 2016-17 from 1.1 per cent in 2015-16 on the back of the contraction in the trade deficit.
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India’s trade deficit narrowed to US$ 112.4 billion in 2016-17 from US$ 130.1 billion in 2015-16.
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Net invisible receipts were lower, mainly due to moderation in both software exports and net private transfer receipts, and higher outgo on account of primary income (profit, interest and dividends).
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Gross FDI inflows to India in 2016-17 at US$ 60.2 billion increased significantly from US$ 55.6 billion in 2015-16.
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Net FDI inflows (i.e., net of outward FDI) in 2016-17 at US$ 35.6 billion moderated marginally from US$ 36.0 billion in 2015-16.
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Portfolio investment recorded a net inflow of US$ 7.6 billion in 2016-17 as against an outflow of US$ 4.5 billion a year ago.
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In 2016-17, there was an accretion of US$ 21.6 billion to the foreign exchange reserves as compared with US$ 17.9 billion in 2015-16.
Table 1: Major Items of India's Balance of Payments |
(US$ Billion) |
|
January-March 2017 P |
January-March 2016 |
2016-17 P |
2015-16 |
Credit |
Debit |
Net |
Credit |
Debit |
Net |
Credit |
Debit |
Net |
Credit |
Debit |
Net |
A. Current Account |
138.3 |
141.7 |
-3.4 |
124.7 |
125.0 |
-0.3 |
521.1 |
536.3 |
-15.2 |
501.4 |
523.5 |
-22.1 |
1. Goods |
77.4 |
107.1 |
-29.7 |
65.8 |
90.6 |
-24.8 |
280.1 |
392.6 |
-112.4 |
266.4 |
396.4 |
-130.1 |
Of which: |
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POL |
9.0 |
25.6 |
-16.6 |
6.2 |
14.7 |
-8.5 |
31.5 |
86.8 |
-55.3 |
30.6 |
82.9 |
-52.4 |
2. Services |
40.7 |
23.1 |
17.6 |
39.4 |
23.3 |
16.1 |
163.1 |
95.7 |
67.5 |
154.3 |
84.6 |
69.7 |
3. Primary Income |
4.5 |
10.0 |
-5.6 |
3.7 |
10.3 |
-6.6 |
16.3 |
42.6 |
-26.3 |
14.7 |
39.1 |
-24.4 |
4. Secondary Income |
15.7 |
1.5 |
14.2 |
15.7 |
0.7 |
15.0 |
61.5 |
5.5 |
56.0 |
66.0 |
3.3 |
62.7 |
B. Capital Account and Financial Account |
145.1 |
142.1 |
3.1 |
127.3 |
127.2 |
0.2 |
551.9 |
537.1 |
14.9 |
510.9 |
487.8 |
23.2 |
Of which: |
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Change in Reserve (Increase (-)/Decrease (+)) |
0.0 |
7.3 |
-7.3 |
0.0 |
3.3 |
-3.3 |
1.2 |
22.8 |
-21.6 |
0.9 |
18.8 |
-17.9 |
C. Errors & Omissions (-) (A+B) |
0.4 |
|
0.4 |
0.2 |
|
0.2 |
0.4 |
|
0.4 |
|
1.1 |
-1.1 |
P: Preliminary |
Note: Total of subcomponents may not tally with aggregate due to rounding off. |
Jose J. Kattoor Chief General Manager
Press Release: 2016-2017/3388
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