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Date : Mar 26, 2024
Developments in India’s Balance of Payments during the Third Quarter (October-December) of 2023-24

Preliminary data on India’s balance of payments (BoP) for the third quarter (Q3), i.e., October-December 2023-24, are presented in Statements I and II.

Key Features of India’s BoP in Q3:2023-24

  • India’s current account balance recorded a deficit of US$ 10.5 billion (1.2 per cent of GDP) in Q3:2023-24, lower than US$ 11.4 billion (1.3 per cent of GDP) in Q2:2023-241 and US$ 16.8 billion (2.0 per cent of GDP) a year ago [i.e., Q3:2022-23]2.

  • The merchandise trade deficit at US$ 71.6 billion was marginally higher than US$ 71.3 billion during Q3:2022-23.

  • Services exports grew by 5.2 per cent on a y-o-y basis on the back of rising exports of software, business and travel services. Net services receipts increased both sequentially and from a year ago that helped cushion the current account deficit.

  • Net outgo on the primary income account, primarily reflecting payments of investment income, increased to US$ 13.2 billion from US$ 12.7 billion a year ago.

  • Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 31.4 billion, an increase of 2.1 per cent over their level during the corresponding period a year ago.

  • In the financial account, foreign direct investment recorded a net inflow of US$ 4.2 billion as compared with a net inflow of US$ 2.0 billion in Q3:2022-23.

  • Foreign portfolio investment recorded a net inflow of US$ 12.0 billion, higher than US$ 4.6 billion during Q3:2022-23.

  • External commercial borrowings to India recorded a net outflow of US$ 2.6 billion in Q3:2023-24 as compared with a net outflow of US$ 2.5 billion a year ago.

  • Non-resident deposits recorded a higher net inflow of US$ 3.9 billion than US$ 2.6 billion a year ago.

  • There was an accretion of foreign exchange reserves (on a BoP basis) to the tune of US$ 6.0 billion in Q3:2023-24 as compared with an accretion of US$ 11.1 billion a year ago (Table 1).

BoP During April-December 2023

  • India’s current account deficit moderated to 1.2 per cent of GDP during April-December 2023 from 2.6 per cent of GDP in the corresponding period a year ago on the back of a lower merchandise trade deficit.

  • Net invisibles receipts were higher during April-December 2023 than a year ago, primarily on account of services and transfers.

  • Net FDI inflow at US$ 8.5 billion during April-December 2023 was lower than US$ 21.6 billion during April-December 2022.

  • During April-December 2023, portfolio investment recorded a net inflow of US$ 32.7 billion as against an outflow of US$ 3.5 billion during the corresponding period a year ago.

  • In April-December 2023, there was an accretion of US$ 32.9 billion to the foreign exchange reserves (on a BoP basis that excludes valuation effects).

Table 1: Major Items of India's Balance of Payments
(US$ billion)
  October-December 2022 October-December 2023 P April-December 2022 April-December 2023 P
  Credit Debit Net Credit Debit Net Credit Debit Net Credit Debit Net
A. Current Account 227.5 244.3 -16.8 235.9 246.4 -10.5 683.9 749.5 -65.6 689.1 720.1 -31.0
1. Goods 105.6 176.9 -71.3 106.7 178.3 -71.6 340.3 553.0 -212.7 319.9 512.7 -192.8
    Of which:                        
        POL 22.7 52.0 -29.3 20.2 46.0 -25.8 73.6 158.6 -85.1 61.9 130.2 -68.3
2. Services 83.4 44.7 38.7 87.8 42.8 45.0 239.5 135.3 104.2 251.7 131.6 120.1
3. Primary Income 7.6 20.3 -12.7 10.0 23.2 -13.2 20.1 53.5 -33.3 30.7 66.1 -35.4
4. Secondary Income 30.9 2.4 28.5 31.5 2.2 29.3 84.0 7.8 76.2 86.8 9.7 77.1
B. Capital Account and Financial Account 176.3 158.5 17.8 215.4 204.1 11.3 549.5 482.5 67.1 603.2 571.4 31.7
    Of which:                        
        Change in Reserve (Increase (-)/Decrease (+)) 0 11.1 -11.1 0 6.0 -6.0 14.7 0 14.7 0 32.9 -32.9
C. Errors & Omissions (-) (A+B) 0 1.0 -1.0 0 0.8 -0.8 0 1.4 -1.4 0 0.7 -0.7
P: Preliminary
Note: Total of sub-components may not tally with aggregate due to rounding off.

(Yogesh Dayal)      
Chief General Manager

Press Release: 2023-2024/2116


1 The current account deficit as per cent of GDP for Q2:2023-24 underwent an upward revision to 1.3 per cent from 1.0 per cent earlier due to an upward adjustment of customs data on merchandise imports.

2 https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=55933. For longer time series data, please see: CIMS DBIE (rbi.org.in) › Statistics › External Sector › International Trade › Quarterly/Yearly.


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