Preliminary data on India’s balance of payments (BoP) for the second quarter (Q2) i.e., July-September 2016-17 are presented in Statements I (BPM6 format) and II (old format). Key Features of India’s BoP in Q2 of 2016-17 -
India’s current account deficit (CAD) at US$ 3.4 billion (0.6 per cent of GDP) in Q2 of 2016-17 was lower than US$ 8.5 billion (1.7 per cent of GDP) in Q2 of 2015-16 but higher than US$ 0.3 billion (0.1 per cent of GDP) in the preceding quarter. -
The contraction in the CAD on a year-on-year (y-o-y) basis was primarily on account of a lower trade deficit (US$25.6 billion) brought about by a larger decline in merchandise imports relative to exports. -
Net services receipts moderated on y-o-y basis, primarily owing to the fall in earnings from software, financial services and charges for intellectual property rights. -
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 15.2 billion, having declined by 10.7 per cent from their level a year ago. -
In the financial account, net inflows of both foreign direct investment and portfolio investment were significantly higher in Q2 on a y-o-y basis. -
Non-resident Indian (NRI) deposits declined to US$ 2.1 billion in Q2 of 2016-17 from US$ 4.2 billion in Q2 of 2015-16. -
Net loans availed by banks witnessed a net repayment of US$ 9.0 billion in Q2 of 2016-17 as against net borrowing of US$ 3.1 billion in Q2 of 2015-16. -
In Q2 of 2016-17, foreign exchange reserves (on BoP basis) increased by US$ 8.5 billion as against a decline of US$ 0.9 billion in Q2 of last year (Table 1). BoP during April-September 2016 (H1 of 2016-17) -
On a cumulative basis, the CAD narrowed to 0.3 per cent of GDP in H1 of 2016-17 from 1.5 per cent in H1 of 2015-16 on the back of the contraction in the trade deficit. -
India’s trade deficit narrowed to US$ 49.5 billion in H1 of 2016-17 from US$ 71.3 billion in H1 of 2015-16. -
Net invisible receipts were lower, mainly due to moderation in software exports and private transfers and higher outgo on account of primary income (profit, interest and dividends). -
Net FDI inflows during H1 of 2016-17 rose by more than 28.8 per cent over the level during the corresponding period of the previous year. -
Portfolio investment recorded a net inflow of US$ 8.2 billion during H1 as against a net outflow of US$ 3.5 billion a year ago. -
In H1 of 2016-17, there was an accretion of US$ 15.5 billion to foreign exchange reserves. | Table 1: Major Items of India's Balance of Payments | | (US$ Billion) | | | July-September 2016 P | July-September 2015 | April-September 2016-17 P | April-September 2015-16 | | | Credit | Debit | Net | Credit | Debit | Net | Credit | Debit | Net | Credit | Debit | Net | | A. Current Account | 127.4 | 130.9 | -3.4 | 127.3 | 135.8 | -8.5 | 252.6 | 256.4 | -3.7 | 254.2 | 268.8 | -14.7 | | 1. Goods | 67.4 | 93.1 | -25.6 | 67.6 | 104.7 | -37.2 | 134.0 | 183.5 | -49.5 | 135.6 | 206.9 | -71.3 | | Of which: | | | | | | | | | | | | | | POL | 7.8 | 20.5 | -12.7 | 8.6 | 23.5 | -14.9 | 14.8 | 39.5 | -24.7 | 17.0 | 48.3 | -31.3 | | 2. Services | 40.5 | 24.3 | 16.3 | 38.7 | 20.9 | 17.8 | 80.1 | 48.0 | 32.0 | 77.0 | 41.4 | 35.6 | | 3. Primary Income | 4.2 | 12.2 | -7.9 | 3.9 | 9.4 | -5.5 | 8.0 | 22.1 | -14.1 | 7.2 | 18.6 | -11.3 | | 4. Secondary Income | 15.2 | 1.4 | 13.9 | 17.1 | 0.8 | 16.3 | 30.5 | 2.7 | 27.9 | 34.3 | 1.9 | 32.4 | | B. Capital Account and Financial Account | 139.5 | 135.3 | 4.2 | 127.5 | 118.5 | 9.0 | 268.6 | 264.3 | 4.3 | 268.5 | 252.4 | 16.2 | | Of which: | | | | | | | | | | | | | | Change in Reserve (Increase (-)/Decrease (+)) | 0.0 | 8.5 | -8.5 | 0.9 | 0.0 | 0.9 | 0.0 | 15.5 | -15.5 | 0.9 | 11.4 | -10.6 | | C. Errors & Omissions (-) (A+B) | | 0.7 | -0.7 | | 0.4 | -0.4 | | 0.6 | -0.6 | | 1.5 | -1.5 | | P: Preliminary; PR: Partially Revised | | Note: Total of subcomponents may not tally with aggregate due to rounding off. | Alpana Killawala
Principal Adviser Press Release : 2016-2017/1506 | |