Invisibles in India’s
Balance of Payments :
An Analysis of Trade in
Services, Remittances
and Income*
The developments in invisibles, which
lend a marked support to India’s balance
of payments, are reflective of the ongoing
structural transformation within the
economy as well as its increasing
integration with the world economy. With
global financial crisis, there was a decline
in invisibles, especially during the second
half of 2008-09, which has also continued
during the first half of the current
financial year. Both invisibles receipts and
payments have registered declines. The
decline in the receipts has mainly been
driven by software services and workers’
remittances while the decline in invisibles
payments was led by travel, transportation
and non-software services. Consequently,
net invisibles declined, though they
continued to lend significant support to
India’s balance of payments, financing
around 68 per cent of India’s trade deficit
during the first half of 2009-10. Despite
the recent slowdown in invisibles, it is
expected to make a turnaround in 2010
and beyond in consonance with the global
economic recovery, which is gaining
momentum. A noticeable development has
been the broad basing of invisibles receipts,
which hitherto have been dominated by
software receipts and workers’ remittances,
with non-software services gaining in
importance in the recent period.
I. Introduction
The invisibles account in balance of
payments reflects the combined effects of
the transactions relating to international trade in services, income associated with
non-resident assets and liabilities, labour
and property and cross border transfers,
mainly workers’ remittances. The invisibles
have been providing substantial support to
India’s balance of payments in the recent
years and are reflective of the ongoing
structural transformation within the
economy as well as its increasing integration
with the world economy. Receipts under
invisibles, particularly in the last one
decade, have grown significantly. The
emphasis on reforms and liberalization
since the early 1990s has not only unfolded
newer opportunities for businesses but also
for skilled labour as reflected in the
direction of India’s trade in goods and
services and nature of labour migration.
This transformation is reflected in the
growth of receipts under invisibles, which
has kept pace with merchandise exports
growth as the principal foreign exchange
earners for the country.
However, mirroring the adverse impact
of the recent global financial crisis, both
invisibles receipts and payments have
registered declines during the first half of
2009-10 as compared with the
corresponding period of the previous year
on top of a significant moderation in growth
during 2008-09. Receipts under both
software and non-software services declined
as invisibles payments too declined mainly
due to lower payments towards travel,
transportation, non-software services and
private transfers. It is noteworthy that
software services, which have registered
phenomenal growth in the recent years and
have been the driver of growth of invisibles
receipts, were also adversely affected by the
global financial crisis and registered declines in the first half of 2009-10. Private transfer
receipts, which have lent significant
strength to India’s BoP position in the
recent years, also exhibited significant
deceleration in growth on account of the
global financial crisis.
In view of their importance, the
developments in different components of
invisibles are analysed and disseminated in
two stages viz., (i) standard presentation
with broad heads on a quarterly basis to
meet the IMF’s Special Data Dissemination
Standards (SDDS) on the Reserve Bank of
India’s website and subsequently in the
monthly bulletin of the Reserve Bank of
India (RBI), and (ii) detailed presentation
with break-up of broad heads is published
in an annual article titled ‘Invisibles in
India’s Balance of Payments’ in the RBI’s
monthly bulletin
1
.
This article seeks to contribute to the
endeavour of providing the disaggregated
information on India’s trade in invisibles
for the period 2007-08 (revised), 2008-09
partially revised) and April-September 2009
preliminary) along with the time series data
since 2000-01. The article is organised as
follows. Section II presents the magnitude
and trends in the invisibles account at the
aggregate level along with their relative
importance in terms of GDP. An analysis of
the various components of invisibles and their dynamics is presented in Section III.
This section also provides an international
perspective to the invisibles account
drawing from cross country experiences.
Concluding observations and a short-term
outlook against the backdrop of the ongoing
global financial crisis are set out in Section
IV. A detailed enumeration of compilation,
dissemination, concepts and definitions of
different heads of invisibles accounts are
presented in Annex I and II.
II. Magnitude and Trends in
Invisibles
The resurgence of invisibles surplus in
the 1990s, after a break in the late 1980s,
has significantly minimised the risk to the
external payments position. Since the early
1990s, as India embarked upon structural
reforms, “invisibles balances” have
witnessed steady increases not only in
absolute terms but also as a per cent to GDP
Table 1 and Chart 1). This, in turn, either restrained the current account deficit within
a narrow corridor or contributed to surplus
on current account in intermittent years,
despite the widening trade deficit. However,
mirroring the impact of the recent global
financial crisis, the growth of India’s
invisibles surplus moderated during 2008-
09 and subsequently turned negative during
the first half of the current financial year.
![1](../scripts/images/2IIB110310_1.gif) |
Table 1 : Trends in India’s Invisibles Receipts and Payments |
Year |
Invisibles Receipts |
Invisibles Payments |
Invisibles Net |
Amount
(US $ million) |
Growth
(%) |
Amount
(US $ million) |
Growth
(%) |
Amount
(US $ million) |
Growth
(%) |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
1990-91 |
7,464 |
-0.5 |
7,706 |
12.0 |
-242 |
- |
1995-96 |
17,664 |
13.6 |
12,217 |
23.7 |
5,447 |
- |
1999-00 |
30,312 |
17.6 |
17,169 |
3.7 |
13,143 |
- |
2000-01 |
32,267 |
6.4 |
22,473 |
30.9 |
9,794 |
-25.5 |
2001-02 |
36,737 |
13.9 |
21,763 |
-3.2 |
14,974 |
52.9 |
2002-03 |
41,925 |
14.1 |
24,890 |
14.4 |
17,035 |
13.8 |
2003-04 |
53,508 |
27.6 |
25,707 |
3.3 |
27,801 |
63.2 |
2004-05 |
69,533 |
29.9 |
38,301 |
49.0 |
31,232 |
12.3 |
2005-06 |
89,687 |
29.0 |
47,685 |
24.5 |
42,002 |
34.5 |
2006-07 |
114,558 |
27.7 |
62,341 |
30.7 |
52,217 |
24.3 |
2007-08 R |
148,875 |
30.0 |
73,144 |
17.3 |
75,731 |
45.0 |
2008-09 PR |
163,534 |
9.8 |
73,612 |
0.6 |
89,923 |
18.7 |
2008-09 (Apr.-Sept.) PR |
85,267 |
32.5 |
36,718 |
15.0 |
48,549 |
49.7 |
2009-10 (Apr.-Sept.) P |
75,368 |
-11.6 |
35,770 |
-2.6 |
39,599 |
-18.4 |
R : Revised. PR : Partially Revised. P : Preliminary. |
Notwithstanding some deceleration
invisibles receipts and payments during
2008-09, they constituted a major portion
of the current account receipts and
payments, respectively. During the period
2001-02 to 2008-09, the invisibles receipts
constituted 45.7 per cent of current account
receipts, while invisibles payments
accounted for 24.2 per cent of current
account payments (Table 2). The lower order
of payments vis-à-vis receipts in the
invisibles account contributed to the build
up of significant surplus, which has
witnessed an average growth of 33.1 per
cent during 2001-02 to 2008-09 and financed
an average of 113.5 per cent of the trade
deficit over the same period. However,
invisibles’ financing of trade deficit has
come down to 75.8 per cent in 2008-09 due
to significant increase in trade deficit
coupled with lower growth in net invisibles.
As invisibles grew at a faster pace than
the overall economic activities, invisibles
receipts and payments as a proportion of GDP rose sharply from 7.7 per cent and 4.6
per cent in 2001-02 to 14.1 per cent and 6.3
per cent, respectively, in 2008-09 (Chart 2).
Table 2 : Selected Indicators on Invisibles |
(Per cent) |
Year |
Net Invisibles/ Trade Deficit |
Invisibles Receipts/ Current Receipts |
Invisibles Payments/ Current Payments |
1 |
2 |
3 |
4 |
1990-91 |
-2.6 |
28.8 |
21.6 |
1995-96 |
48.0 |
35.3 |
21.9 |
1999-00 |
73.7 |
44.7 |
23.7 |
2000-01 |
78.6 |
41.5 |
28.0 |
2001-02 |
129.4 |
45.1 |
27.9 |
2002-03 |
159.4 |
43.8 |
27.9 |
2003-04 |
202.7 |
44.7 |
24.3 |
2004-05 |
92.7 |
44.9 |
24.4 |
2005-06 |
80.9 |
46.0 |
23.3 |
2006-07 |
84.5 |
47.1 |
24.6 |
2007-08 R |
82.8 |
47.3 |
22.1 |
2008-09 PR |
75.8 |
46.4 |
19.3 |
R : Revised. PR : Partially Revised. |
At a disaggregated level, the major
contributor to invisibles receipts in India
has been services exports followed by
transfers and income (Table 3). Services
exports accounted for about 62 per cent of
the total invisible receipts in 2008-09.
Traditionally, while services relating to trade
in goods, such as transportation and
financing were the major constituents, the
rapid developments in telecommunications
and information technology has facilitated
the emergence of business and computer
services as the main drivers of the growth
in invisibles receipts. Thus, the focus of
services trade has shifted from facilitating
trade in goods to trade in services as an
independent entity in itself with the four
modes of supply viz., cross-border supply,
consumption abroad, commercial presence
and presence of a natural person. Reflecting
these factors, the importance of services
exports in India has grown significantly,
with the services-GDP ratio rising from 1.4 per cent in 1990-91 to 8.8 per cent in 2008-
09 driven by software services, which have
grown in terms of both size and country of
destination. India has emerged as a major
software exporting country with an export
level of US $ 46.3 billion in 2008-09,
expanding at an average rate of around 28
per cent in the past eight years. With the
continued buoyancy in software exports, on
an average, they constituted about 44 per
cent of total services exports of India during
2001-02 to 2008-09. Apart from software,
business services have also grown
significantly, reflecting the emergence of
India as a preferred investment destination
following a greater integration of the
domestic economy with the rest of the
world and strong macroeconomic
fundamentals.
![2](../scripts/images/2IIB110310_2.gif) |
Table 3: Major Components of Invisibles Account in Terms of GDP |
(Per cent to GDP) |
Year |
Receipts |
Payments |
Net |
Ser vices |
Transfers |
Income |
Total |
Ser vices |
Transfers |
Income |
Total |
Ser vices |
Transfers |
Income |
Total |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
13 |
1990-91 |
1.4 |
0.8 |
0.1 |
2.3 |
1.1 |
0.0 |
1.3 |
2.4 |
0.3 |
0.8 |
-1.2 |
-0.1 |
1995-96 |
2.1 |
2.5 |
0.4 |
5.0 |
2.1 |
0.0 |
1.3 |
3.4 |
0.0 |
2.5 |
-0.9 |
1.5 |
1999-00 |
3.5 |
2.8 |
0.4 |
6.7 |
2.6 |
0.0 |
1.2 |
3.8 |
0.9 |
2.8 |
-0.8 |
2.9 |
2000-01 |
3.5 |
2.9 |
0.6 |
7.0 |
3.2 |
0.0 |
1.7 |
4.9 |
0.3 |
2.9 |
-1.1 |
2.1 |
2001-02 |
3.6 |
3.4 |
0.7 |
7.7 |
2.9 |
0.1 |
1.6 |
4.6 |
0.7 |
3.3 |
-0.9 |
3.1 |
2002-03 |
4.1 |
3.5 |
0.7 |
8.3 |
3.4 |
0.2 |
1.4 |
5.0 |
0.7 |
3.3 |
-0.7 |
3.4 |
2003-04 |
4.5 |
3.8 |
0.6 |
8.9 |
2.8 |
0.1 |
1.4 |
4.3 |
1.7 |
3.7 |
-0.8 |
4.6 |
2004-05 |
6.2 |
3.1 |
0.7 |
10.0 |
4.0 |
0.1 |
1.4 |
5.5 |
2.2 |
3.0 |
-0.7 |
4.4 |
2005-06 |
7.1 |
3.2 |
0.8 |
11.1 |
4.3 |
0.1 |
1.5 |
5.9 |
2.9 |
3.1 |
-0.7 |
5.2 |
2006-07 |
8.1 |
3.4 |
1.0 |
12.5 |
4.9 |
0.2 |
1.8 |
6.9 |
3.2 |
3.3 |
-0.8 |
5.7 |
2007-08 |
7.7 |
3.8 |
1.2 |
12.7 |
4.4 |
0.2 |
1.6 |
6.2 |
3.3 |
3.6 |
-0.4 |
6.5 |
2008-09 |
8.8 |
4.1 |
1.2 |
14.1 |
4.5 |
0.2 |
1.6 |
6.3 |
4.3 |
3.9 |
-0.4 |
7.8 |
R : Revised. PR : Partially Revised. |
Within invisibles, ‘transfer receipts’
account for about 29 per cent of the total
receipts that constituted about 4 per cent
of GDP in 2008-09. Private transfers have
relatively been a more stable component of
invisibles receipts and it grew from US$ 13.1
billion in 2000-01 to US$ 46.9 billion
2008-09, broadly in consonance with rise in overall economic activity. This reflects a
steady increase in inward remittances for
family maintenance and higher local
withdrawals under NRI deposits on the back
of better investment opportunities. With
steady increase in private transfers, India
continued to retain its prominent position
among the leading remittance receiving
countries in the world. The sustained
expansion in remittances since the 1990s
was underpinned by structural reforms,
including a market-based exchange rate,
current account convertibility as well as
shifts in the labour migration pattern to
increasingly high skilled categories.
However, reflecting the adverse impact of
the recent global economic crisis, receipts
under private transfers moderated during
the second half of 2008-09 as compared with
the first half of the year.
Receipts under the income account
have also increased substantially in the
recent years, except in 2008-09 when it
virtually remained stagnant, reflecting
mainly higher earnings on deployment of
foreign currency assets. Large-scale
monetary easing by the major advanced economies and resultant lower level of
interest rates led to stagnant interest income
during 2008-09 (Chart 3).
![3](../scripts/images/2IIB110310_3.gif) |
In line with the increase in invisibles
receipts, invisibles payments have also risen
in recent years though the increase has been
lower than that of receipts. The services
payments that constituted about 71 per cent
of total invisibles payments in 2008-09, are
primarily driven by payments on account
of business, transportation and travel
services. The services payments increased
from 3.2 per cent of GDP in 2000-01 to 4.5
per cent of GDP in 2008-09 reflecting
increased business activity and strong
growth in imports. On the other hand,
payments under two other sub-heads, viz.,
income and transfers have been broadly
stable, moving in a narrow range of 1.4-1.8
per cent of GDP and 0.1-0.2 per cent of GDP,
respectively, during the period. Thus,
overall rise in invisibles payments from 4.9
per cent of GDP in 2000-01 to 6.3 per cent
of GDP in 2008-09 has been much lower
than the growth in invisibles receipts
resulting in a significant improvement in net invisibles from 2.1 per cent of GDP in
2000-01 to 7.8 per cent of GDP in 2008-09.
Latest Developments
The robust growth trend observed in
invisibles receipts and payments in the past
few years was reversed during the first half
(April-September) of 2009-10, reflecting a
lagged impact of slowdown in the advanced
economies following the financial crisis
(Table 4). Invisibles receipts declined by
11.6 per cent during April-September 2009
as compared with the corresponding period
of the previous year (32.5 per cent growth
during April-September 2008). The decline
in invisibles receipts was mainly attributed
to the lower receipts under almost all the
components of services. Though, invisibles
payments also declined, due to lower
payments towards travel, transportation,
non-software services and private transfers,
on net basis, invisibles stood lower during
the first half of 2009-10 as compared with
the corresponding period of the previous
year. At this level, the invisibles surplus
financed about 68.0 per cent of trade deficit during April-September 2009 as against 75.4
per cent during April-September 2008.
Table 4: Invisibles Gross Receipts and Payments: Recent Trend |
(US $ million) |
Items |
Invisibles Receipts |
Invisibles Payments |
2007-08 |
2008-09 |
2008-09 |
2009-10 |
2007-08 |
2008-09 |
2008-09 |
2009-10 |
April-
March (R) |
April-
March (PR) |
April-
Sept (PR) |
April-
Sept (P) |
April-
March (R) |
April-
March (PR) |
April-
Sept (PR) |
April-
Sept (P) |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
A. |
Services |
90,342 |
101,678 |
50,979 |
40,057 |
51,490 |
52,047 |
25,870 |
24,686 |
1. |
Travel |
11,349 |
10,894 |
5,290 |
4,805 |
9,258 |
9,425 |
4,874 |
4,397 |
2. |
Transportation |
10,014 |
11,286 |
5,656 |
5,056 |
11,514 |
12,820 |
7,079 |
4,998 |
3. |
Insurance |
1,639 |
1419 |
727 |
771 |
1,044 |
1130 |
533 |
655 |
4. |
Government not included elsewhere |
331 |
389 |
211 |
200 |
376 |
793 |
206 |
232 |
5. |
Miscellaneous |
67,010 |
77,691 |
39,095 |
29,225 |
29,298 |
27,879 |
13,177 |
14,404 |
|
Of which: |
|
|
|
|
|
|
|
|
|
Software |
40,300 |
46,300 |
24,201 |
21,409 |
3,358 |
2,814 |
1,778 |
829 |
B. |
Transfers |
44261 |
47,547 |
26,570 |
27,612 |
2,316 |
2,749 |
1,485 |
1,032 |
C. |
Income |
14,272 |
14,309 |
7,718 |
7,700 |
19,339 |
18,816 |
9,363 |
10,052 |
1. |
Investment Income |
13,811 |
13,483 |
7,273 |
7,267 |
18,244 |
17,506 |
8,704 |
9,358 |
2. |
Compensation of Employees |
461 |
825 |
444 |
433 |
1,095 |
1309 |
659 |
695 |
Total
(A+B+C) |
148,875 |
163,534 |
85,267 |
75,368 |
73,144 |
73,612 |
36,718 |
35,770 |
R : Revised. PR : Partially Revised. P : Preliminary. |
A detailed component-wise analysis of
invisibles receipts and payments is
discussed below for a better understanding
the dynamics of India’s invisibles
account, especially from a cross-country
perspective.
III. Composition of Invisibles
III.1 Trade in Services
The trade in services comprises of
commercial services categorised under
transportation, travel and other commercial
services, and Government services not
included elsewhere (GNIE). Other
commercial services comprise of
communication, construction, insurance,royalties and licence fees, other business
services, personal, cultural and recreational
services, and computer and information
services.
An important feature of services exports
of India has been a structural shift since 2003-
04, driven by the emergence of new avenues
of services exports attributed to a rapid
expansion in international trade and
investment facilitated by an increased
liberalization and the use of technology.
According to the latest data published by the
IMF, India’s share in world exports of services
has more than doubled between 2003 and
2008 to reach 2.7 per cent (Table 5).
Reflecting the positive developments in
terms of the comparative advantage and the
continued buoyancy of India’s services
exports, India was ranked at the 10th position in terms of its market share in the
World services exports during 2008, which
is an improvement over its 11th
position last
year (Table 6).
Table 5: Trade in Services Exports of India |
Year |
Exports
(US $ billion) |
Share in World
Exports (%) |
1 |
2 |
3 |
2001 |
17.3 |
1.1 |
2002 |
19.5 |
1.2 |
2003 |
23.9 |
1.3 |
2004 |
38.3 |
1.7 |
2005 |
55.8 |
2.2 |
2006 |
75.4 |
2.6 |
2007 |
87.0 |
2.6 |
2008 |
104.2 |
2.7 |
Source : Reserve Bank of India and Balance of Payments
Statistics, December 2009, IMF. |
At a disaggregated level, the trade in
services has been dominated mainly by
software services and non-software
miscellaneous services, which include
business and professional services (Table 7).
Software services continued to be buoyant,
with its share in total services exports increasing to 45.5 per cent in 2008-09 from
44.6 percent in 2007-08. Despite a decline
in software exports during the first half of
2009-10, its share in total services exports
increased to 53.4 per cent during the period
indicating that the decline in other
categories of services exports has been higher. Within the services exports, the
rising prominence of business services
reflects the high skill intensity of the Indian
work force. The shares of travel in total
services export has generally exhibited
declining trend in the past two decades
despite a revival in international tourist
interest in India in recent years. The share
of travel in total services exports declined
while that of transportation remained
constant during 2008-09.
Table 6: Comparative Position of India among
Top Service Exporters, 2008 |
Sr. No. |
Country |
Exports
(US $ billion) |
Share (%) |
1 |
2 |
3 |
4 |
1. |
USA |
545.6 |
14.1 |
2. |
UK |
287.7 |
7.5 |
3. |
Germany |
246.7 |
6.4 |
4. |
France |
164.9 |
4.3 |
5. |
Japan |
148.8 |
3.9 |
6. |
China |
147.1 |
3.8 |
7. |
Spain |
143.6 |
3.7 |
8. |
Italy |
120.2 |
3.1 |
9. |
Netherlands |
105.6 |
2.7 |
10. |
India |
104.2 |
2.7 |
11. |
Ireland |
101.6 |
2.6 |
12. |
Hong Kong |
92.3 |
2.4 |
13. |
Belgium |
86.5 |
2.2 |
Source: Balance of Payments Statistics, December 2009,
IMF. |
Table 7: Composition of India’s Services Exports (Receipts) |
(Per cent) |
Year |
Travel |
Transpo rtation |
Insur ance |
G.n.i.e |
Software
Services |
Non-software
Miscellaneous
Services* |
Total
Services |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
1990-91 |
32.0 |
21.6 |
2.4 |
0.3 |
- |
43.6 |
100.0 |
1995-96 |
36.9 |
27.4 |
2.4 |
0.2 |
- |
33.1 |
100.0 |
2000-01 |
21.5 |
12.6 |
1.7 |
4.0 |
39.0 |
21.3 |
100.0 |
2001-02 |
18.3 |
12.6 |
1.7 |
3.0 |
44.1 |
20.3 |
100.0 |
2002-03 |
16.0 |
12.2 |
1.8 |
1.4 |
46.2 |
22.4 |
100.0 |
2003-04 |
18.7 |
11.9 |
1.6 |
0.9 |
47.6 |
19.2 |
100.0 |
2004-05 |
15.4 |
10.8 |
2.0 |
0.9 |
40.9 |
29.9 |
100.0 |
2005-06 |
13.6 |
11.0 |
1.8 |
0.5 |
40.9 |
32.1 |
100.0 |
2006-07 |
12.4 |
10.8 |
1.6 |
0.3 |
42.4 |
32.4 |
100.0 |
2007-08 (R) |
12.6 |
11.1 |
1.8 |
0.4 |
44.6 |
29.6 |
100.0 |
2008-09 (PR) |
10.7 |
11.1 |
1.4 |
0.4 |
45.5 |
30.9 |
100.0 |
G.n.i.e: Government not included elsewhere.
* : Include business and professional services.
R : Revised.
PR : Partially Revised. |
III.1.1 Software Services
Exports of software and IT-enabled
services (ITES) increased to US $ 46.3 billion
in 2008-09 as compared to US $ 40.3 billion
during 2007-08 (Table 8). The Indian IT-BPO
industry, which experienced exceptional
growth benefitting from growing
globalization, has emerged over time as a key
sector of the economy in terms of
contribution to growth, export earnings,
investment, employment and overall
economic and social development.
Notwithstanding increasing competitive pressures, India continues to remain as an
attractive source due to its low cost of
operations, high quality of product and
services, and readily available skilled
manpower. Furthermore, a favourable time
zone difference with North America and
Europe helps Indian companies achieve
round the clock international operations and
customer service. India’s software exports
have been offsetting trade deficit
significantly in recent years, which has
helped in containing current account deficit
at comfortable level. Despite the global
economic and financial crisis and the related
pressures on external demand, exports of
software and IT-enabled services exhibited
a steady growth of around 15 per cent during
2008-09. Although India’s software exports
remained strong over the years, slowdown
in global demand due to the crisis did affect
the export performance to some extent.
According to National Association of Software
and Service Companies (NASSCOM), while
the US (60 per cent) and the UK (22 per cent)
remained India’s largest markets for IT-BPO
exports in 2008-09, the industry has also been steadily expanding to other regions -
with exports to continental Europe, in
particular, growing significantly in the recent
years. The strategy of geographical
diversification along with strong focus on
productivity, benchmarking and enhanced
operational efficiencies has helped the
industry to retain its competitive edge as the
global leader in software services exports.
Table 8: Software Services Exports of India |
(US $ million) |
Year |
IT Services Exports |
ITES-BPO Exports |
Total Software Services Exports |
1 |
2 |
3 |
4 |
1995-96 |
754 |
- |
754 |
1999-00 |
3,397 |
565 |
3,962 |
2000-01 |
5,411 |
930 |
6,341 |
2001-02 |
6,061 |
1,495 |
7,556 |
2002-03 |
7,100 |
2,500 |
9,600 |
2003-04 |
9,200 |
3,600 |
12,800 |
2004-05 |
13,100 |
4,600 |
17,700 |
2005-06 |
17,300 |
6,300 |
23,600 |
2006-07 |
22,900 |
8,400 |
31,300 |
2007-08 R |
29,400 |
10,900 |
40,300 |
2008-09 PR |
33,600 |
12,700 |
46,300 |
R: Revised. PR: Partially Revised. ITES: IT enabled services.
BPO: Business Process Outsourcing.
Source: National Association of Software and Service Companies (NASSCOM). |
According to the NASSCOM, the
industry’s vertical market exposure was
well diversified across several mature and
emerging sectors. Banking, financial
services and insurance (BFSI) remained the
largest vertical market for Indian IT-BPO
exports (50.4 per cent), followed by hightechnology
and telecommunications (22 per
cent) in 2008-09. From a customers’ point
of view, the focus has been on consolidation,
integration and regulation – all of which are
expected to drive newer business
opportunities for the Indian IT industry.
Broad-based growth, across all the
segments of IT services, BPO, product
development and engineering services, has reinforced India’s leadership as the key
sourcing location for a wide range of
technology related services. Accordingly,
India has continued to be ranked first in the
exports of computer and information
services in the international economy since
2005 (Table 9). According to a recent
NASSCOM Report titled “IT-BPO Sector in
India-Strategic Review 2010”, software export
revenues are estimated to be around US$ 49.7
billion in 2009-10, registering a growth of
about 7 per cent over the previous year, and
contributing about 67 per cent of the total
IT-BPO revenues. IT and ITES exports are
expected to account for over 99 per cent of
total software services exports, employing
around 1.8 million employees. In terms of
geographical coverage, the year 2009-10 was
characterised by a strong revival in the US,
which increased its share to around 61 per
cent. Emerging markets of Asia Pacific also
contributed significantly to overall growth.
However, revenues from Continental Europe
and UK, which registered the highest growth
in the last five years, have lagged behind
during 2009-10 due to the lingering of recessionary conditions coupled with loss of
revenue on account of currency fluctuations
in these regions.
Table 9: Computer and Information Services Exports* |
(US $ billion) |
Sr. No. |
Country |
2000 |
2005 |
2006 |
2007 |
2008 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
1. |
India |
6.3 |
22.0 |
29.2 |
37.0 |
48.3 |
2. |
Ireland |
7.5 |
19.6 |
21.0 |
26.1 |
34.2 |
3. |
Germany |
3.8 |
8.4 |
9.7 |
12.2 |
15.1 |
4. |
U.K. |
4.3 |
11.2 |
13.0 |
14.1 |
12.9 |
5. |
U.S.A. |
5.6 |
7.3 |
10.3 |
12.7 |
12.6 |
6. |
Finland |
0.2 |
1.5 |
1.5 |
1.3 |
8.2 |
7. |
Sweden |
1.2 |
2.7 |
3.6 |
6.5 |
7.6 |
8. |
Israel |
4.2 |
4.5 |
5.3 |
5.8 |
6.9 |
9. |
Netherlands |
1.2 |
3.7 |
3.9 |
4.2 |
6.7 |
10. |
China,P.R. Mainland |
0.4 |
1.8 |
3.0 |
4.3 |
6.3 |
*: Ranking is for the year 2008.
Source: Balance of Payments Statistics Year Book 2009, IMF and Reserve Bank of India. |
The year 2009 reportedly saw increased
adoption of outsourcing from not only the
biggest segment i.e., BFSI, but also new
emerging verticals of retail, healthcare and
utilities. India topped the list accounting for
more than half of global market in
technology and business process
outsourcing (around US$ 47 billion of US$
94 billion global sourcing revenue).
NASSCOM expects IT services to grow by
2.4 per cent in 2010, and 4.2 per cent in 2011
as companies coming out of recession tend
to harness the need for information
technology to create competitive advantage.
III.1.2 Business and Professional Services
Business, professional and technical
services are among the most thriving
services sectors in developed countries as well as in some developing countries like
Brazil and India. These services range from
legal to management services, and from
architectural to advertising services. India’s
non-software services constituted almost 31
per cent of total services exports in 2008-
09, which in turn, have supported steady
growth in invisibles receipts. Within nonsoftware
services exports, the share of
business and professional services, which
had grown significantly in recent years and
constituted around 63 per cent in 2007-08,
declined to around 52 per cent in 2008-09,
mirroring the impact of global financial
crisis (Table 10). Both business services
receipts and payments, which increased
significantly in the recent years, declined
during 2008-09.
The major constituents of business
services have been management
consultancy, architectural engineering and
other technical services, maintenance of
offices abroad and trade-related services (Table 11). These reflect the underlying
momentum in trade in professional and
technology related services. While receipts
under business and management
consultancy services increased, the receipts
under trade related services, architectural,
engineering, and other technical services
declined during 2008-09. Business services
payments also declined during 2008-09
mainly on account of decline in trade related
services and expenses on account of
maintenance of offices abroad. With the
rising demand for infrastructure and as a
favourable destination for international
companies for meeting the IT needs, India
is emerging as an important country for
trade in engineering services. Engineering
services mainly include consultancy in
designing and detailed designing services.
Table 10: Break up of Non-Software Miscellaneous Receipts and Payments |
(US $ million) |
Item |
Receipts |
Payments |
2007-08 |
2008-09 |
2008-09 |
2009-10 |
2007-08 |
2008-09 |
2008-09 |
2009-10 |
April-March (R) |
April-March (PR) |
April-Sept (PR) |
April-Sept (P) |
April-March (R) |
April-March (PR) |
April-Sept (PR) |
April-Sept (P) |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
1. |
Communication Services |
2,408 |
2,172 |
1,250 |
725 |
860 |
1087 |
523 |
625 |
2. |
Construction |
764 |
867 |
372 |
299 |
708 |
896 |
349 |
641 |
3. |
Financial |
3,217 |
3,948 |
2,288 |
1,402 |
3,133 |
2,958 |
1,586 |
2,062 |
4. |
News Agency |
503 |
800 |
397 |
172 |
506 |
386 |
165 |
162 |
5. |
Royalties, Copyrights & License Fees |
157 |
132 |
7 1 |
116 |
1,038 |
1,721 |
805 |
823 |
6. |
Business Services |
16,772 |
16,445 |
8,410 |
4,847 |
16,553 |
15,435 |
7,251 |
8,477 |
7. |
Personal, Cultural & Recreational Services |
562 |
729 |
297 |
234 |
211 |
322 |
173 |
147 |
8. |
Others |
2,327 |
6,298 |
1,809 |
21 |
2,931 |
2260 |
546 |
638 |
Total (1 to 8) |
26,710 |
31,391 |
14,894 |
7,816 |
25,940 |
25,065 |
11,398 |
13,575 |
R : Revised. PR : Partially Revised. P : Preliminary.
Note: Break-up of Business Services (item 6) is given in Table 11. |
Table 11: Business Services |
( US $ million) |
Item |
Receipts |
Payments |
2007-08 |
2008-09 |
2008-09 |
2009-10 |
2007-08 |
2008-09 |
2008-09 |
2009-10 |
April-March (R) |
April-March (PR) |
April-Sept (PR) |
April-Sept (P) |
April-March (R) |
April-March (PR) |
April-Sept (PR) |
April-Sept (P) |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
1. |
Trade Related |
2,234 |
2,016 |
1,150 |
675 |
2,285 |
1,651 |
828 |
1,036 |
2. |
Business & Management Consultancy |
4,433 |
5,017 |
2,605 |
1,549 |
3,422 |
3,530 |
1,355 |
2,324 |
3. |
Architectural, Engineering and other Technical Services |
3,145 |
1,766 |
903 |
655 |
3,090 |
3,130 |
1,498 |
1,939 |
4. |
Maintenance of Offices abroad |
2,861 |
2,984 |
1,269 |
704 |
2,761 |
2,673 |
1,150 |
1,152 |
5. |
Others |
4,099 |
4,662 |
2,483 |
1,265 |
4,995 |
4,451 |
2,420 |
2,026 |
|
Total (1 to 5) |
16,772 |
16,445 |
8,410 |
4,847 |
16,553 |
15,435 |
7,251 |
8,477 |
P : Preliminary.
PR : Partially Revised.
R : Revised. |
III.1.3 Travel
Receipts under travel represent
expenditure by foreign tourists towards hotel expenses and goods and services
purchased including domestic travel. Travel
receipts, which had benefited from robust
growth in tourist arrivals in the recent years
(Table 12), however, declined during 2008-09.
Travel receipts at US$ 10.9 billion during
2008-09 declined by 4.0 per cent as against
an increase of 24.4 per cent in 2007-08, reflecting a slowdown in tourist arrivals in
the country, particularly during the second
half of the year, as a result of global
economic slowdown and scare created by
the outbreak of swine flu. According to the
data released by the Ministry of Tourism,
foreign tourist arrivals declined by 8.6 per
cent in the second half of 2008-09 as against
an increase of 8.3 per cent in the first half
of 2008-09.
Table 12: Foreign Tourist Arrivals In India |
Year |
Arrivals (millions) |
1 |
2 |
1991 |
1.68 |
1995 |
2.12 |
2000 |
2.65 |
2001 |
2.54 |
2002 |
2.38 |
2003 |
2.73 |
2004 |
3.46 |
2005 |
3.90 |
2006 |
4.45 |
2007 |
5.08 |
2008 |
5.28 |
Source: Ministry of Tourism and Culture, Government
of India. |
Even travel payments, which have
increased in the recent years, reflecting
liberalization of the payments system,
growing globalization, rising services
exports and associated business travel as
well as the preference for higher studies
abroad, also came under pressure during
2008-09. Travel payments growth remained
lower at 1.8 per cent during 2008-09 (38.5
per cent in 2007-08) reflecting a sharp
reduction in outbound travels.
India’s share in world tourists’ earnings
remained at 1.3 per cent in 2008, the same
as in 2007. However, India’s ranking in the
world tourist earnings slipped to 20
th
position in 2008 from 17
th
in 2007 (23
rd
in
1990) (Table 13).
III.1.4 Transportation
In view of the rising merchandise trade over
the years, the receipts and payments
towards transportation, which mainly
represent carriage of goods and people as
well as other distributive services (such as
port charges, bunker fuel, stevedoring,
cabotage, warehousing), have also increased
over the years. Receipts under
transportation increased to US$ 11.3 billion
during 2008-09 from US$ 10.0 billion in
2007-08, while payments were higher at US$ 12.8 billion as compared with US$ 11.5
billion during the same period. At this level,
the transportation receipts constituted 11.1
per cent of total services exports during
2008-09, the same as in the previous year.
Table 13: Comparative Position of India among
Top Travel Earnings Countries, 2008 |
Sr. No |
Country |
US $ million |
Share in World
Travel Earnings (%) |
1 |
2 |
3 |
4 |
1. |
USA |
134,910 |
14.3 |
2. |
Spain |
61,978 |
6.6 |
3. |
France |
56,270 |
5.9 |
4. |
Italy |
46,192 |
4.9 |
5. |
China |
40,843 |
4.3 |
6. |
Germany |
40,020 |
4.2 |
7. |
United Kingdom |
36,420 |
3.9 |
8. |
Australia |
25,062 |
2.7 |
9. |
Turkey |
21,951 |
2.3 |
10. |
Austria |
21,630 |
2.3 |
11. |
Thailand |
17,646 |
1.9 |
12. |
Greece |
17,416 |
1.8 |
13. |
Malaysia |
15,293 |
1.6 |
14. |
Canada |
15,267 |
1.6 |
15. |
Switzerland |
14,464 |
1.5 |
16. |
Netherlands |
13,346 |
1.4 |
17. |
Mexico |
13,289 |
1.4 |
18. |
Sweden |
12,631 |
1.3 |
19. |
Russia |
11,944 |
1.3 |
20. |
India |
11,832 |
1.3 |
21. |
Belgium |
11,810 |
1.2 |
22. |
Poland |
11,771 |
1.2 |
23. |
Croatia |
11,267 |
1.2 |
24. |
Egypt |
10,985 |
1.2 |
25. |
Portugal |
10,980 |
1.2 |
Source : Balance of Payments Statistics, December 2009, IMF and Reserve Bank of India. |
III.1.5 Insurance
Insurance consists of insurance on
exports/imports, premium on life and nonlife
policies and reinsurance premium from
foreign insurance companies. Insurance
receipts and payments are generally associated with the movement in India’s
merchandise trade. The share of insurance
receipts in total services receipts, which had
remained in a narrow range of around 2 per
cent of total services exports since the early
1990s, decreased to around 1.4 per cent in
2008-09.
III.1.6 ‘Other’ Component in Services
In addition to the software services,
business services, travel, transportation
and insurance, the other component under
trade in services includes a host of other
commercial services such as financial,
communication, construction and
personal, cultural and recreational
services. However, financial and
communication services are the two major
components (Table 10). Under financial
services, both receipts and payments have witnessed a significant increase in recent
years reflecting greater merger and
acquisition activities by domestic
companies abroad as well as increasing
access by Indian corporates and banks to
international financial markets. Financial
services cover financial intermediation and
auxiliary services provided by banks, stock
exchanges, factoring enterprises, credit
card enterprises and other enterprises. The
receipts relating to financial services
increased during 2008-09 while payments
registered decline, mainly on account of
significant decline during the last quarter
of the year. Both financial services exports
and imports were around US $ 3.9 billion
and 3.0 billion, respectively, in 2008-09.
India ranked 8
th
position in terms of
financial services exports and 5th
position
in terms of import of financial services
(Table 14).
Table 14: Comparative Position of India among Top Financial Services Providers, 2007 |
Rank |
Exporters |
Value
(US $
million) |
Share in
15
Economies |
Rank |
Importers |
Value
(US $
million) |
Share in
15
Economies |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
1. |
European Union (27) |
160,187 |
56.9 |
1. |
European Union (27) |
71,061 |
62.5 |
2. |
United States |
58,266 |
20.7 |
2. |
United States |
18,928 |
16.7 |
3. |
Switzerland |
20,517 |
7.3 |
3. |
Canada |
4,072 |
3.6 |
4. |
Hong Kong, China |
12,425 |
4.4 |
4. |
Japan |
3,610 |
3.2 |
5. |
Singapore |
6,547 |
2.3 |
5. |
India |
3,262 |
2.9 |
6. |
Japan |
6,207 |
2.2 |
6. |
Hong Kong, China |
2,807 |
2.5 |
7. |
Korea, Republic of |
4,001 |
1.4 |
7. |
Switzerland |
1,790 |
1.6 |
8. |
India |
3,886 |
1.4 |
8. |
Singapore |
1754 |
1.5 |
9. |
Canada |
3,234 |
1.1 |
9. |
Russian Federation |
1472 |
1.3 |
10. |
Taipei, Chinese |
1,302 |
0.5 |
10. |
Norway |
1122 |
1.0 |
11. |
Russian Federation |
1174 |
0.4 |
11. |
Ukraine |
887 |
0.8 |
12. |
Brazil |
1090 |
0.4 |
12. |
Brazil |
807 |
0.7 |
13. |
Norway |
1021 |
0.4 |
13. |
Taipei, Chinese |
782 |
0.7 |
14. |
South Africa |
876 |
0.3 |
14. |
Korea, Republic of |
696 |
0.6 |
15. |
Australia |
856 |
0.3 |
15. |
Turkey |
623 |
0.5 |
|
Above 15 |
281,590 |
100 |
|
Above 15 |
113,675 |
100 |
Source: International Trade Statistics 2009, WTO. |
Communication services exports have
also increased significantly in recent years,
reflecting technological transformation of
the domestic economy as well as significant
liberalization of the telecom sector.
However, during 2008-09 communication
services exports declined by around 10 per
cent. India ranked 6
th
amongst the world’s
top 15 telecommunication exporters in 2007
(Table 15).
III.2 Transfers
Transfers comprise official transfers
and private transfers. Private transfers,
mainly workers’ remittances, have
remained buoyant in recent years on the
back of robust global output growth, amidst
constant improvement in remittance
infrastructure domestically. However, in the
aftermath of global economic slowdown, the
growth of remittances, though positive,significantly decelerated to 7.8 per cent in
2008-09 from 41.1 per cent in the previous
year. The details of private transfers are set
out below.
Table 15: Comparative Position of India among Top Telecommunication Exporters, 2007 |
Sr.
No. |
Country/Region |
Value
(US $ million) |
Share in
15 Economies |
Annual perce ntage change |
1 |
2 |
3 |
4 |
5 |
1. |
European Union (27) |
34,028 |
61.8 |
18 |
2. |
United States |
8,283 |
19.0 |
14 |
3. |
Kuwait |
4,667 |
15.0 |
37 |
4. |
Canada |
1505 |
8.5 |
.. |
5. |
Russian Federation |
1184 |
2.7 |
60 |
6. |
India |
1144 |
2.1 |
.. |
7. |
Malaysia |
599 |
2.1 |
-7 |
8. |
Hong Kong, China |
556 |
1.1 |
-2 |
9. |
Philippines |
517 |
1.0 |
-10 |
10. |
Turkey |
506 |
0.9 |
22 |
11. |
Korea, Republic of |
482 |
0.9 |
14 |
12. |
Norway |
465 |
0.9 |
46 |
13. |
Morocco |
401 |
0.8 |
4 |
14. |
Mexico |
400 |
0.7 |
-14 |
15. |
Croatia |
360 |
0.7 |
23 |
|
Above 15 |
55,100 |
100 |
- |
Source: International Trade Statistics 2009, WTO. |
III.2.1 Private Transfers: Remittances for
Family Maintenance and Local Withdrawals
from NRI Deposits
Inflows from overseas Indians are
mainly in the form of: (i) inward
remittances towards family maintenance,
and (ii) deposits in the Non-Resident Indian
(NRI) deposit schemes with the banks in
India. Transfers represent one-sided
transactions, i.e., transactions that do not
have any quid pro quo, such as grants, gifts,
and migrants’ transfers by way of
remittances for family maintenance,
repatriation of savings and transfer of
financial and real resources linked to change
in the resident status of migrants.
Accordingly, remittances from overseas
Indians towards family maintenance and
the funds domestically withdrawn from the
NRE deposits and NRO deposit schemes are
treated as private transfers, which are
included in the current account of the
balance of payments. As against this, the
inflows from overseas Indians for deposits
in the NRI deposit schemes are treated as
capital account transactions.
III.2.2 Trends and Composition of Workers’
Remittances
III.2.2.1 Trends
Workers’ remittances to India have shown
buoyancy in the recent years and have
imparted significant resilience and strength
to India’s balance of payments in the past,especially under adverse external
conditions. At present, India is among the
top remittance receiving countries in the
World. Remittances have helped in
offsetting India’s merchandise trade deficit
to a large extent. The significance of
remittances can be gauged from the increase
in the share of private transfer receipts in
India’s GDP from 0.7 per cent in 1990-91 to
4.1 per cent in 2008-09. The relative stability
in such transfers reflected the steady
increase in inward remittances for family
maintenance and higher local withdrawals
on the back of better domestic investment
opportunities. From the sources side, a
significant share of remittances to India
continued to be from the oil exporting
countries of the Middle East. Another
important source of remittance inflows to
India is the US. In the Indian context, a
major part of funds remitted by expatriate
workers is channelised through inflows to
non-resident deposits in the form of local
withdrawals. During 2008-09, private
transfer receipts, comprising mainly
remittances from Indians working overseas,
increased over the previous year. However,
there was a moderation in remittances
inflows during the second half of 2008-09,
with deepening global financial crisis
affecting the employment prospects and
sharp decline in oil prices affecting the
demand for expatriate labour in the oil
exporting Gulf countries from where a
significant share of remittances to India
originates. As a result, there has been
moderate rise in remittance inflows from
overseas Indians to US $ 46.9 billion during
2008-09 as compared with US $ 43.5 billion
in 2007-08 (Table 16). Similarly, private
transfer receipts increased to 27.5 billion in
April-September 2009 from US$ 26.4 billion in the corresponding period of the
preceding year. The share of private
transfers in the current receipts declined
marginally to 13.3 per cent from 13.8 per
cent during 2007-08.
Table 16: Select Indicators of Private Transfers to India |
Year |
Amount
(US $ billion) |
Share in Current Receipts
(Per cent) |
Private Transfers
(Per cent to GDP) |
1 |
2 |
3 |
4 |
1990-91 |
2.1 |
8.0 |
0.7 |
1995-96 |
8.5 |
17.1 |
2.4 |
1999-00 |
12.3 |
18.3 |
2.7 |
2000-01 |
13.1 |
16.8 |
2.8 |
2001-02 |
15.8 |
19.4 |
3.3 |
2002-03 |
17.2 |
18.0 |
3.4 |
2003-04 |
22.2 |
18.5 |
3.7 |
2004-05 |
21.1 |
13.6 |
3.0 |
2005-06 |
25.0 |
12.8 |
3.1 |
2006-07 |
30.8 |
12.7 |
3.4 |
2007-08 (R) |
43.5 |
13.8 |
3.7 |
2008-09 (PR) |
46.9 |
13.3 |
4.1 |
R: Revised.
PR: Partially Revised. |
Remarkable increase in workers’
remittances could be traced to a few
structural factors. First, in the 1990s,
migration to Australia, Canada, and the
United States increased significantly,
particularly among information technology
(IT) workers on temporary work permits.
Second, the swelling of migrants’ ranks
coincided with better incentives to send and
invest money, liberalisation of regulations
and controls and more flexible exchange
rates. The convenient remittance services
provided by Indian and international banks
have also shifted such remittance flows
from informal channels to banking
channels. Third, non-resident Indians have
also responded to several attractive deposit
schemes and the policy initiatives on thisfront. Apart from these structural factors,
some current developments that guided the
remittances flows include: depreciation of
the rupee, hike in interest rate ceilings on
NRI deposits since September 2008 and
uncertainties in oil-prices, which might
have induced the workers to remit their
money to India as a hedging mechanism due
to its relatively better growth prospects.
According to the World Bank, India
continues to be the top remittance receiving
country in the world and it received
significantly higher remittances to the tune
of US$ 51.6 billion in 2008 as compared with
US$ 37.2 billion in 2007 (Table 17). As per
World Bank’s estimates, remittances to
India declined to US$ 47.0 billion in 2009
reflecting a lagged response to weak global
economy (Box I).
III.2.2.2 Composition
Private transfers primarily comprise of
remittances for Family Maintenance, Local
Withdrawals from Non-Resident Rupee
Account, Gold and Silver brought through
Passenger Baggage, and Personal gifts/
donations to charitable/religious
institutions.
III.2.2.2.1 Remittances for Family Maintenance
The share of remittances repatriated by
the overseas Indians for family
maintenance, which contributed a
significant share of remittance flows to
India at about 60 per cent in 1999-2000
declined to around 42 per cent in 2005-06.
Subsequently, however, its share increased
and reached 51.0 per cent during 2008-09.
(Table 18).
Table 17: Workers' Remittances - Top Ten Receiving Countries* |
(US $ million) |
Sr. No. |
Country |
2001 |
2005 |
2006 |
2007 |
2008 |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
1. |
India |
14,273 |
22,125 |
28,334 |
37,217 |
51,581 |
2. |
China |
7,037 |
24,102 |
27,954 |
38,791 |
48,524 |
3. |
Mexico |
10,146 |
23,062 |
26,877 |
27,136 |
26,304 |
4. |
Philippines |
6,164 |
13,566 |
15,251 |
16,302 |
18,643 |
5. |
France |
9,194 |
11,945 |
13,031 |
14,513 |
15,908 |
6. |
Spain |
4,720 |
7,961 |
8,890 |
10,739 |
11,776 |
7. |
Germany |
3,933 |
6,933 |
7,585 |
9,839 |
11,064 |
8. |
Poland |
1,995 |
6,482 |
8,496 |
10,496 |
10,727 |
9. |
Nigeria |
1,167 |
3,329 |
5,435 |
9,221 |
9,980 |
10. |
Romania |
116 |
4,733 |
6,718 |
8,539 |
9,380 |
* : Ranking is for the year 2008.
Source: Migration and Development Brief (No. 11), World
Bank. |
III.2.2.2.2 Local Withdrawals from Non-
Resident Rupee Deposits
Local withdrawals from non-resident
rupee deposit schemes, as part of workers’
remittances, are the withdrawals from Non-
Resident (External) Rupee Account
[NR(E)RA] and Non-Resident Ordinary
(NRO) Rupee Account by the non-resident
or his dependent for local use. Such local
withdrawals/redemptions from NRI
deposits cease to exist as liability in the
capital account of the balance of payments
and assume the form of private transfers,
which is included in the current account of
the balance of payments.
Although the average contribution of
local withdrawals to total private transfers
declined from 50 per cent in the first half of
the 1990s to only 29 per cent in the latter
half, a reversal in this trend has been
witnessed in the recent period. Since
2003-04, there has been relatively rising significance of the local withdrawal route
as a conduit to remittance inflows to India
(Table 19). The share of local withdrawals in the total private transfers increased
marginally to 44.0 per cent during 2008-09
as compared to 43.5 per cent during 2007-08.
Box I: Impact of Global Crisis on Remittances
Remittance flows to developing countries had
shown relative stability during the past crises and
were also countercyclical during downturns in the
recipient economy. However, during the recent
global economic crisis, with both the developed
and developing countries, albeit to different
degrees, facing economic slowdown, it was argued
that remittances to developing countries could
witness a significant slowdown.
According to the latest World Bank estimates
(November 2009), from a regional perspective, East
Asia and Pacific, and South Asia regions are
expected to record the lowest decline of close to 2
per cent, while Europe and Central Asia may
witness the highest decline of about 15 per cent.
Apart from falling income on account of jobless
growth, the increased uncertainty about exchange
rates during periods of heightened volatility and
immigration controls are expected to depress
remittance flows. Remittance flows to developing
countries, in fact increased to US$ 338 billion in
2008 from US$ 289 billion in 2007 and are
projected to decline only moderately by about 6
per cent to US$ 317 billion in 2009. This is mainly
attributed to the fact that while fresh migration
has fallen, there is no evidence of existing migrants
returning even though the job market has been
weak in many destination countries.
Indian Scenario
In the past, workers’ remittances to India have
imparted significant resilience and strength to
India’s balance of payments, particularly during
periods of notable capital outflows or adverse
external shocks. The surge in workers’ remittances
to India, responding to oil boom in the Middle East
during the 1980s, and the information technology
revolution in the 1990s, has put India among the
top remittance receiving countries in the World.
Remittances have also helped to a large extent in
offsetting India’s merchandise trade deficit. The
relative stability in such transfers, compared to
other capital account items such as NRI deposits,
foreign direct investment and portfolio
investment, has also enabled the containment of
the current account deficits at modest levels in the
face of pressures on other accounts of balance of
payments (BoP).
During the current crisis, however, there has been
a significant deceleration in the rate of growth of
remittance flows to India, especially since the
second half of 2008-09. Notwithstanding this trend,
India retained its top position as the largest
recipient of remittances in 2008 at US$ 51.6 billion,
as per the World Bank data, Moreover, as per the
balance of payments (BoP) data released by the RBI,
remittances have increased further during the first
half of 2009-10 (April-September) as compared to
the second half of 2008-09. Thus, the apprehension
that global recession and the weakening
employment prospects in the host countries could
affect India’s inward remittance flows significantly
during 2009-10 appears to have been unfounded.
The higher remittance flows to India could be
attributed to a number of factors, such as, relatively
higher growth performance of the Indian economy
making it an attractive investment destination, the
hike in interest rate ceilings on NRI deposits since
September 2008 and uncertainties in oil-prices,
which might have induced the workers to remit
their money to India as a hedging mechanism due
to its relatively better growth prospects. According
to a recent RBI Survey on Remittances by Overseas
Indian (November, 2009), North America
continued to be the most important source region
of remittances to India accounting for nearly 38
per cent of the total remittances, followed by the
Gulf region (27 per cent) and Europe (18 per cent).
In view of the above, any further improvement in
the outlook for remittances to India would critically
hinge upon the economic recovery in the advanced
economies. Moreover, the recent increase in
international oil prices is likely to support
remittances from Indian workers in the Gulf
region. Going by the latest trend, India could retain
its position as the largest remittance recipient
country even during 2009, thereby providing
resilience to the invisibles account.
References:
1. Ratha, D., S. Mohapatra and A. Silwal (2009), “Migration and Remittance Trends 2009”,
Migration and Development Brief 11, World
Bank, November.
2. World Bank (2009), Global Development
Finance 2009.
Table 18: Trend and Composition of Private Transfers to India |
(US $ million) |
Year |
Inward remittances for family maintenance |
Local withdrawals/ redemptions from NRI Deposits |
Gold and silver brought through passenger baggage |
Personal gifts/donations to charitable/religious institutions in India |
Total |
1 |
2 |
3 |
4 |
5 |
6 |
1999-00 |
7,423 |
4,120 |
13 |
734 |
12,290 |
2000-01 |
7,747 |
4,727 |
10 |
581 |
13,065 |
2001-02 |
6,578 |
8,546 |
13 |
623 |
15,760 |
2002-03 |
9,914 |
6,644 |
18 |
613 |
17,189 |
2003-04 |
10,379 |
10,585 |
19 |
1,199 |
22,182 |
2004-05 |
9,973 |
8,907 |
27 |
2,168 |
21,075 |
2005-06 |
10,455 |
12,454 |
16 |
2,026 |
24,951 |
2006-07 |
14,740 |
13,208 |
27 |
2,860* |
30,835 |
2007-08 (R) |
21,922 |
18,919 |
26 |
2,641* |
43,508 |
2008-09 (PR) |
23,886 |
20,617 |
19 |
2381* |
46,903 |
2008-09(Apr-Sep) (PR) |
13,882 |
11,168 |
12 |
1309* |
26,371 |
2009-10(Apr-Sep) (P) |
14,677 |
11,818 |
56 |
964* |
27,515 |
*: Including adjustment from the total.
R: Revised. PR: Partially Revised.
P: Preliminary. |
Table 19: Inflows and Outflows from NRI Deposits, Local Withdrawals and Remittances |
(US $ million) |
Year |
Inflows |
Outflows |
Local Withdrawals/ Redemption from NRI Deposits |
Private Transfers (included in current Account of BoP) |
Local Withdrawal as % of Private Transfers (4)/(5) (Per cent) |
1 |
2 |
3 |
4 |
5 |
6 |
1999-00 |
7,405 |
5,865 |
4,120 |
12,290 |
33.5 |
2000-01 |
8,988 |
6,672 |
4,727 |
13,065 |
36.2 |
2001-02 |
11,435 |
8,681 |
8,546 |
15,760 |
54.2 |
2002-03 |
10,214 |
7,236 |
6,644 |
17,189 |
38.7 |
2003-04 |
14,281 |
10,639 |
10,585 |
22,182 |
47.7 |
2004-05 |
8,071 |
9,035 |
8,907 |
21,075 |
42.3 |
2005-06 |
17,835 |
15,046 |
12,454 |
24,951 |
49.9 |
2006-07 |
19,914 |
15,593 |
13,208 |
30,835 |
42.8 |
2007-08 (R) |
29,400 |
29,222 |
18,919 |
43,508 |
43.5 |
2008-09 (PR) |
37,147 |
32,858 |
20,617 |
46,903 |
44.0 |
2008-09 ( Apr-Sept) (PR) |
18,274 |
17,202 |
11,168 |
26,371 |
42.3 |
2009-10 ( Apr-Sept) (P) |
21,513 |
18,649 |
11,818 |
27,515 |
43.0 |
R : Revised.
PR : Partially Revised.
P : Preliminary. |
The rising trend in local withdrawals could
be attributed to higher income levels of
migrants in the recent past as well as better
domestic investment opportunities
engendered by robust growth and relatively
benign inflation conditions. Even during the
current global financial and economic crisis,
the gross inflows to NRI deposits and the
steady trend in local withdrawals indicate
the stability and sustainability of remittance
inflows over the medium term. It may be
noted that a major part of outflows from NRI
deposits (constituting about 85 per cent, on
an average) is in the form of local
withdrawals from NRI deposits. However,
during 2007-08, the share declined
significantly to around 65 per cent and
further to 63 per cent in 2008-09, reflecting
higher outflows under the FCNR (B) accounts.
III.2.2.2.3 Gold and Silver brought through
Passenger Baggage
Under the liberalised policy for
imports, the Government of India permitted
import of gold by certain nominated
agencies for sale to jewellery manufacturers,
exporters, NRIs, holders of special import
licences and domestic users. Nominated
agencies/banks were permitted to import
gold under different arrangements such as
suppliers/buyers credit basis, consignment
basis and outright purchase. Thus, after
1997-98 gold imports through passenger
baggage by the returning Indians lost its
importance as a conduit of remittance flows.
III.2.2.2.4 Personal gifts/donations to
charitable/religious institutions
The inflows under this channel, which
had generally increased upto 2006-07, cameunder some strain subsequently. The money
repatriated is predominantly donations to
charitable/religious institutions/NGOs.
III.3 Investment income
Investment income receipts are mainly
driven by the interest and discount earnings
on the RBI investment of foreign exchange
reserves and reinvested earnings of the
Indian direct investment enterprises
abroad. Investment income receipts rose
significantly since the late 1990s due to the
build-up of foreign exchange reserves. The
rise in reinvested earnings reflects the
upward trend in Indian overseas investment
by the Indian companies to take advantage
of their access to international markets,
natural resources, distribution networks,
foreign technologies and other strategic
assets such as brand names.
Investment income payments mainly
include payment of interest on commercial
borrowings, external assistance, NRI
deposits and other short-term liabilities. In
addition, more importantly, it includes
reinvested earnings of the FDI enterprises
operating in India as well as dividend and
profit payments on liabilities such as FDI
and portfolio investments. While the
interest payments depend on the level of
debt and the interest rate environment, the
reinvested earning payments are influenced
by the profitability, and reinvestment
decisions of FDI enterprises operating in
India. A shift in the level of investment
income payments since 2000-01 partly
reflects the inclusion of reinvested earnings
of FDI enterprises as per the revised
procedure of recording FDI in India in line
with the international best practices. The growth in investment income payments,
especially since 2004-05, has been mainly
led by reinvested earnings and dividends
and profits reflecting higher returns in the
Indian capital market and improved
corporate profitability (Table 20).
Table 20 : Details of Receipts and Payments of Investment Income |
(US $ million) |
Item |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
(R) |
2008-09
(PR) |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
A. |
Total Receipts (1 to 5) |
2,554 |
3,254 |
3,405 |
3,774 |
4,124 |
6,229 |
8,926 |
13,811 |
13,483 |
1. |
Interest Receipts on loans to Non-residents |
84 |
201 |
154 |
198 |
65 |
101 |
163 |
1,469 |
951 |
2. |
Dividend and Profits |
11 |
57 |
34 |
40 |
92 |
225 |
450 |
476 |
401 |
3. |
Reinvested Earnings |
340 |
700 |
1,104 |
552 |
248 |
1,092 |
1,076 |
1,084 |
1,084 |
4. |
Interest/Discount Earnings on Foreign Exchange Reserves |
1,950 |
1,757 |
1,835 |
2,115 |
3,014 |
4,519 |
6,641 |
10,124 |
10,480 |
5. |
Others |
169 |
539 |
278 |
869 |
705 |
292 |
596 |
658 |
567 |
B. |
Total Payments (1 to7) |
7,218 |
7,098 |
6,370 |
7,531 |
8,219 |
11,491 |
15,688 |
18,244 |
17,506 |
1. |
Interest Payment on NRI Deposits |
1,811 |
1,808 |
1,413 |
1,642 |
1,353 |
1,497 |
1,969 |
1,813 |
1,547 |
2. |
Interest Payment on ECBs |
2,020 |
1,945 |
1,486 |
2,584 |
1,283 |
3,148 |
1,709 |
2,647 |
2,702 |
3. |
Interest Payments on External Assistance |
827 |
792 |
1,111 |
822 |
710 |
825 |
982 |
1,143 |
1,010 |
4. |
Interest on others (ST) Loans/Bonds |
80 |
80 |
22 |
80 |
400 |
347 |
200 |
415 |
120 |
5. |
Dividends and Profits |
1,047 |
711 |
462 |
878 |
1,991 |
2,502 |
3,486 |
3,226 |
3,172 |
6. |
Reinvested Earnings |
1,350 |
1,645 |
1,832 |
1,459 |
1,903 |
2,760 |
5,828 |
7,679 |
6,428 |
7. |
Others |
83 |
117 |
44 |
66 |
579 |
412 |
1,514 |
1,321 |
2,527 |
C. |
Net Investment Income (A-B) |
-4,664 |
-3,844 |
-2,965 |
-3,757 |
-4,095 |
-5,262 |
-6,762 |
-4,433 |
-4,023 |
R: Revised. PR : Partially Revised. |
While both receipts and payments
under the investment account have
increased in recent years, except during
2008-09, the higher payments relative to
receipts have resulted in net deficit (Table 21).
During 2008-09, lower global interest rates
resulting from significant monetary easing
by advanced economies to contain the
adverse impact of the global financial crisis
resulted in a marginal decline in investment
income receipts to US$ 13.5 billion from US$
13.8 billion in 2007-08. Similarly,
investment income payments declined
marginally to US$ 17.5 billion during
2008-09 (US$ 18.2 billion in 2007-08) mainly due to decline in profit and dividends, and
reinvested earnings of FDI companies in
India.
Table 21: Investment Income |
(US $ million) |
Year |
Receipts |
Payments |
Net |
1 |
2 |
3 |
4 |
1990-91 |
368 |
4,120 |
-3,752 |
1995-96 |
1,429 |
4,634 |
-3,205 |
1999-00 |
1,783 |
5,478 |
-3,695 |
2000-01 |
2,554 |
7,218 |
-4,664 |
2001-02 |
3,254 |
7,098 |
-3,844 |
2002-03 |
3,405 |
6,949 |
-3,544 |
2003-04 |
3,774 |
7,531 |
-3,757 |
2004-05 |
4,124 |
8,219 |
-4,095 |
2005-06 |
6,229 |
11,491* |
-5,262 |
2006-07 |
8926 |
15688 |
-6762 |
2007-08 R |
13811 |
18244 |
-4433 |
2008-09 PR |
13483 |
17506 |
-4023 |
2008-09 (Apr-Sept)PR |
7273 |
8704 |
-1431 |
2009-10 (Apr-Sept)P |
7267 |
9358 |
-2090 |
* Includes, inter alia, interest payments (US$ 1,718 million)
of India Millennium Deposits.
R: Revised.
PR: Partially Revised. P: Preliminary. |
IV. Concluding Remarks and
Outlook
The revival of invisibles surplus since
the 1990s has lent considerable support to
India’s balance of payments position. The
persistence of invisibles surplus coupled
with significant capital inflows have
facilitated the process of forward movement
in regard to easing of payment restrictions
on current and capital account transactions
both for individuals and corporates. It is
noteworthy that both gross receipts and
payments in India’s invisibles accounts have
risen significantly over the years reflecting
gradual opening up of Indian economy and
growing volume of economic activity. The
strong growth in services exports, especially
of software and information technology
services, and buoyant remittances from
overseas Indians have imparted stability to
invisibles receipts. On the other hand, the
growth in invisibles payments has been
mainly led by interest payments relating to
external debt, dividends/profits paid on
foreign investment, and payments relating
to technology related and business services.
Not only in absolute terms but also as a per
cent of GDP, net invisibles have witnessed
a significant improvement in recent years.
The two major components of India’s
invisibles, viz., software services and private
transfers have provided stability to India’s
current receipts. The significant
technological transformation of the Indian
economy as well as the growth in skilled
manpower has enabled this process. India
continued to be a leader in software exports
as well as private transfer receipts during
2008-09. Notwithstanding the adverse
impact of the global crisis, software services
exports (4.0 per cent of GDP) and private transfer receipts (4.1 per cent of GDP) were
higher during 2008-09 than the previous
year, though, with the deepening of the
global financial crisis, some moderation was
witnessed during the second half of the
year.
The robust growth trend observed in
invisibles receipts and payments in the past
few years was reversed during the first half
(April-September) of 2009-10, reflecting a
lagged impact of slowdown in the advanced
economies following the financial crisis.
Both invisibles receipts and payments
declined as compared with the
corresponding period of the preceding year
as a result of which, net invisibles surplus
stood lower during the first half of 2009-10.
All the components of services,
including software services, registered lower
receipts during the first half of the year as
compared with the corresponding period of
the previous year. Private transfer receipts,
which have lent considerable support and
stability to India’s balance of payments in the
recent years, also came under strain
registering significantly decelerated growth
during the first half of the current financial
year. However, improving global economic
conditions signifying return of consumer
confidence and renewal of business growth
is expected to drive IT spending in the
foreseeable future.
The pickup in demand, both external
and internal, on the back of global economic
recovery and strong growth performance of
the Indian economy should augur well for
the growth prospects of other services
during 2010. The hardening of global
interest rates as major economies exit the
accommodative monetary policy stance could lead to an increase in investment
income receipts. Even in the case of private
transfers, the deceleration in growth in the
current financial year in lagged response to
a weak global economy will reverse slowly
but reverting to the pre-crisis growth levels
may take some time and would depend on
the pace of the global economic recovery.
Thus, India’s invisibles sector, which has
come under some pressure during 2009-10,
is expected to make a turnaround in 2010
and beyond and will continue to lend
considerable support to India’s balance of
payments position in future.
References
1. International Monetary Fund (1993), ‘Manual on Balance of Payments
Statistics’, 5th
edition.
2. International Monetary Fund (2009),
Balance of Payments Statistics Yearbook
2009.
3. NASSCOM (2010), ‘Strategic Review
2010- The IT Industry in India’
February.
4. NASSCOM (2006), ‘Globalisation of
Engineering Services – The Next
Frontier for India’ August, Research
Report.
5. Ratha, D., S. Mohapatra and A. Silwal
(2009), ‘Migration and Remittance
Trends 2009’, Migration and
Development Brief 11, World Bank,
November.
6. Reserve Bank of India (2007), ‘Report
of the Technical Group on Statistics for
International Trade in Banking
Services’.
7. Reserve Bank of India (2010), ‘Remittances from Overseas Indians:
Modes of Transfer, Transaction Cost and
Time Taken’, Reserve Bank of India
Bulletin (forthcoming).
Statement 1: Invisibles by Category |
(US $ million) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
I. |
Invisibles Receipts (A+B+C) |
30,312 |
32,267 |
36,737 |
41,925 |
53,508 |
69,533 |
89,687 |
114,558 |
148,875 |
163,534 |
|
A. Services |
15,709 |
16,268 |
17,140 |
20,763 |
26,868 |
43,249 |
57,659 |
73,780 |
90,342 |
101,678 |
|
1) Travel |
3,036 |
3,497 |
3,137 |
3,312 |
5,037 |
6,666 |
7,853 |
9,123 |
11,349 |
10,894 |
|
2) Transportation |
1,707 |
2,046 |
2,161 |
2,536 |
3,207 |
4,683 |
6,325 |
7,974 |
10,014 |
11,286 |
|
3) Insurance |
231 |
270 |
288 |
369 |
419 |
870 |
1,062 |
1,195 |
1,639 |
1,419 |
|
4) GNIE |
582 |
651 |
518 |
293 |
240 |
401 |
314 |
253 |
331 |
389 |
|
5) Miscellaneous |
10,153 |
9,804 |
11,036 |
14,253 |
17,965 |
30,629 |
42,105 |
55,235 |
67,010 |
77,691 |
|
Of which: |
|
|
|
|
|
|
|
|
|
|
|
Software Services |
3,962 |
6,341 |
7,556 |
9,600 |
12,800 |
17,700 |
23,600 |
31,300 |
40,300 |
46,300 |
|
B. Transfers |
12,672 |
13,317 |
16,218 |
17,640 |
22,736 |
21,691 |
25,620 |
31,470 |
44,261 |
47,547 |
|
1) Official Transfers |
382 |
252 |
458 |
451 |
554 |
616 |
669 |
635 |
753 |
645 |
|
2) Private Transfers |
12,290 |
13,065 |
15,760 |
17,189 |
22,182 |
21,075 |
24,951 |
30,835 |
43,508 |
46,903 |
|
C. Income |
1,931 |
2,682 |
3,379 |
3,522 |
3,904 |
4,593 |
6,408 |
9,308 |
14,272 |
14,309 |
|
1) Investment Income |
1,783 |
2,554 |
3,254 |
3,405 |
3,774 |
4,124 |
6,229 |
8,926 |
13,811 |
13,483 |
|
2) Compensation of Employees |
148 |
128 |
125 |
117 |
130 |
469 |
179 |
382 |
461 |
825 |
II. |
Invisibles Payments (A+B+C) |
17,169 |
22,473 |
21,763 |
24,890 |
25,707 |
38,301 |
47,685 |
62,341 |
73,144 |
73,612 |
|
A. Services |
11,645 |
14,576 |
13,816 |
17,120 |
16,724 |
27,823 |
34,489 |
44,311 |
51,490 |
52,047 |
|
1) Travel |
2,139 |
2,804 |
3,014 |
3,341 |
3,602 |
5,249 |
6,638 |
6,684 |
9,258 |
9,425 |
|
2) Transportation |
2,410 |
3,558 |
3,467 |
3,272 |
2,328 |
4,539 |
8,337 |
8,068 |
11,514 |
12,820 |
|
3) Insurance |
122 |
223 |
280 |
350 |
363 |
722 |
1,116 |
642 |
1,044 |
1,130 |
|
4) GNIE |
270 |
319 |
283 |
228 |
212 |
411 |
529 |
403 |
376 |
793 |
|
5) Miscellaneous |
6,704 |
7,672 |
6,772 |
9,929 |
10,219 |
16,902 |
17,869 |
28,514 |
29,298 |
27,879 |
|
Of which: |
|
|
|
|
|
|
|
|
|
|
|
Software Services |
138 |
591 |
672 |
737 |
476 |
800 |
1,338 |
2,267 |
3,358 |
2,814 |
|
B. Transfers |
34 |
211 |
362 |
802 |
574 |
906 |
933 |
1,391 |
2,316 |
2,749 |
|
1) Official Transfers |
0 |
0 |
0 |
0 |
0 |
356 |
475 |
381 |
514 |
413 |
|
2) Private Transfers |
34 |
211 |
362 |
802 |
574 |
550 |
458 |
1,010 |
1,802 |
2,336 |
|
C. Income |
5,490 |
7,686 |
7,585 |
6,968 |
8,409 |
9,572 |
12,263 |
16,639 |
19,339 |
18,816 |
|
1) Investment Income |
5,478 |
7,218 |
7,098 |
6,370 |
7,531 |
8,219 |
11,491 |
15,688 |
18,244 |
17,506 |
|
2) Compensation of |
|
|
|
|
|
|
|
|
|
|
|
Employees |
12 |
468 |
487 |
598 |
878 |
1,353 |
772 |
951 |
1,095 |
1,309 |
Net Invisibles (I-II) |
13,143 |
9,794 |
14,974 |
17,035 |
27,801 |
31,232 |
42,002 |
52,217 |
75,731 |
89,923 |
R : Revised. PR : Partially Revised. |
Statement 2: Invisibles Receipts by Category of Transactions |
(US $ million) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
Invisibles Receipts (A+B+C) |
30,312 |
32,267 |
36,737 |
41,925 |
53,508 |
69,533 |
89,687 |
114,558 |
148,875 |
163,534 |
A) Services |
15,709 |
16,268 |
17,140 |
20,763 |
26,868 |
43,249 |
57,659 |
73,780 |
90,342 |
101,678 |
1) Travel Account |
|
|
|
|
|
|
|
|
|
|
i) Tourist Expenses in India |
3,036 |
3,497 |
3,137 |
3,312 |
5,037 |
6,666 |
7,853 |
9,123 |
11,349 |
10,894 |
Total |
3,036 |
3,497 |
3,137 |
3,312 |
5,037 |
6,666 |
7,853 |
9,123 |
11,349 |
10,894 |
2) Transportation Account |
|
|
|
|
|
|
|
|
|
|
a ) Sea Transport |
|
|
|
|
|
|
|
|
|
|
i) Surplus remitted by Indian companies operating abroad |
61 |
34 |
71 |
50 |
36 |
208 |
451 |
452 |
507 |
578 |
ii) Operating expenses of foreign companies in India |
161 |
87 |
103 |
145 |
289 |
462 |
638 |
924 |
773 |
1,023 |
iii) Charter hire charges |
42 |
99 |
85 |
83 |
94 |
48 |
144 |
97 |
207 |
193 |
b) Air Transport |
|
|
|
|
|
|
|
|
|
|
i) Surplus remitted by Indian companies operating abroad |
180 |
185 |
154 |
170 |
97 |
130 |
200 |
307 |
690 |
448 |
ii) Operating expenses of foreign companies in India |
20 |
22 |
10 |
5 |
18 |
107 |
37 |
83 |
155 |
129 |
iii) Charter hire charges |
24 |
4 |
18 |
5 |
18 |
20 |
21 |
35 |
42 |
19 |
c) Freight on exports |
1,065 |
1,458 |
1,476 |
1,815 |
2,470 |
3,660 |
4,407 |
5,481 |
6,921 |
7,502 |
d) Others |
154 |
157 |
244 |
263 |
185 |
48 |
427 |
595 |
717 |
1,394 |
Total (a to d) |
1,707 |
2,046 |
2,161 |
2,536 |
3,207 |
4,683 |
6,325 |
7,974 |
10,014 |
11,286 |
3) Insurance Account |
|
|
|
|
|
|
|
|
|
|
a) Insurance on export |
192 |
243 |
247 |
303 |
373 |
478 |
575 |
717 |
964 |
1,047 |
b) Premium |
|
|
|
|
|
|
|
|
|
|
i) Life |
1 |
1 |
5 |
21 |
0 |
25 |
37 |
64 |
98 |
56 |
ii) Non-life |
7 |
5 |
8 |
6 |
12 |
289 |
78 |
113 |
132 |
77 |
iii) Reinsurance from foreign companies |
10 |
4 |
8 |
16 |
9 |
19 |
200 |
82 |
185 |
81 |
c) Commission on Business received from foreign companies |
0 |
2 |
4 |
4 |
5 |
29 |
85 |
79 |
125 |
54 |
d) Others |
21 |
15 |
16 |
19 |
20 |
30 |
87 |
140 |
136 |
104 |
Total (a to d) |
231 |
270 |
288 |
369 |
419 |
870 |
1,062 |
1,195 |
1,639 |
1,419 |
4) Government Not Included Elsewhere |
|
|
|
|
|
|
|
|
|
|
a) Maintenance of foreign embassies and diplomatic missions in India |
205 |
222 |
195 |
178 |
185 |
229 |
208 |
139 |
197 |
261 |
b) Maintenance of international and regional institutions in India |
377 |
429 |
323 |
115 |
55 |
172 |
106 |
114 |
134 |
128 |
Total (a to b) |
582 |
651 |
518 |
293 |
240 |
401 |
314 |
253 |
331 |
389 |
Statement 2: Invisibles Receipts by Category of Transactions (Contd.) |
(US $ million) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
5) Miscellaneous Account |
|
|
|
|
|
|
|
|
|
|
a) Communication services |
1,064 |
1,138 |
752 |
812 |
990 |
1,384 |
1,575 |
2,262 |
2,408 |
2,172 |
b) Construction services |
389 |
536 |
144 |
178 |
458 |
491 |
242 |
700 |
764 |
867 |
c) Financial services |
361 |
347 |
292 |
676 |
299 |
512 |
1,209 |
3,106 |
3,217 |
3,948 |
d) Software services |
3,962 |
6,341 |
7,556 |
9,600 |
12,800 |
17,700 |
23,600 |
31,300 |
40,300 |
46,300 |
of which: IT Services |
3,397 |
5,411 |
6,061 |
7,100 |
9,200 |
13,100 |
17,300 |
22,900 |
29,400 |
33,600 |
ITES-BPO |
565 |
930 |
1,495 |
2,500 |
3,600 |
4,600 |
6,300 |
8,400 |
10,900 |
12,700 |
e) News agency services |
342 |
114 |
9 |
59 |
69 |
171 |
185 |
334 |
503 |
800 |
f) Royalties, copyright and license fees |
54 |
60 |
22 |
23 |
32 |
71 |
191 |
97 |
157 |
133 |
g) Business services (i to xii)$ |
643 |
334 |
519 |
807 |
1,296 |
5,167 |
9,307 |
14,544 |
16,772 |
16,445 |
i) Merchanting services |
|
|
|
|
|
278 |
389 |
239 |
417 |
1,067 |
ii) Trade related services |
|
|
|
|
|
429 |
521 |
1,325 |
2,233 |
2,016 |
iii) Operational Leasing Services |
|
|
|
|
|
28 |
107 |
101 |
476 |
471 |
iv) Legal services |
|
|
|
|
|
257 |
277 |
605 |
702 |
721 |
v) Accounting / Auditing services |
|
|
|
|
|
38 |
68 |
176 |
228 |
228 |
vi) Business Management & Consultancy services |
643 |
334 |
519 |
807 |
1,296 |
1,556 |
2,320 |
4,476 |
4,433 |
5,017 |
vii) Advertising/ trade fair |
|
|
|
|
|
162 |
342 |
694 |
712 |
508 |
viii) Research & Development services |
|
|
|
|
|
221 |
395 |
760 |
1,335 |
1,385 |
ix) Architectural Engineering & other technical services |
|
|
|
|
|
1,417 |
3,193 |
3,457 |
3,144 |
1,766 |
x) Agricultural Mining & on-site processing services |
|
|
|
|
|
52 |
32 |
46 |
57 |
85 |
xi) Maintenance of offices abroad services |
|
|
|
|
|
724 |
1,577 |
2,638 |
2,861 |
2,984 |
xii) Environmental services |
|
|
|
|
|
5 |
86 |
27 |
174 |
198 |
h) Personal, Cultural & Recreational services |
|
|
|
|
|
105 |
189 |
243 |
562 |
729 |
i) Refunds/rebates |
53 |
52 |
54 |
44 |
51 |
380 |
75 |
293 |
270 |
291 |
j) Other services$$ |
3,285 |
882 |
1,688 |
2,054 |
1,970 |
4,648 |
5,532 |
2,357 |
2,057 |
6,006 |
Total (a to j) |
10,153 |
9,804 |
11,036 |
14,253 |
17,965 |
30,629 |
42,105 |
55,235 |
67,010 |
77,691 |
B) Transfers |
12,672 |
13,317 |
16,218 |
17,640 |
22,736 |
21,691 |
25,620 |
31,470 |
44,261 |
47,547 |
1) Official Transfers |
|
|
|
|
|
|
|
|
|
|
i) Donations received from Non-residents |
40 |
85 |
44 |
32 |
90 |
63 |
53 |
61 |
67 |
58 |
ii) Grant under PL 480 II |
96 |
97 |
68 |
58 |
33 |
30 |
38 |
31 |
28 |
7 |
iii)Grants from other Governments |
246 |
70 |
346 |
361 |
431 |
523 |
578 |
543 |
658 |
579 |
Total (i to iii) |
382 |
252 |
458 |
451 |
554 |
616 |
669 |
635 |
753 |
645 |
2) Private Transfers |
|
|
|
|
|
|
|
|
|
|
i) Inward remittance from Indian workers abroad for family maintenance etc. |
7,423 |
7,747 |
6,578 |
9,914 |
10,379 |
9,973 |
10,455 |
14,740 |
21,920 |
23,886 |
ii) Local withdrawals/ redemptions from non-resident deposits |
4,120 |
4,727 |
8,546 |
6,644 |
10,585 |
8,907 |
12,454 |
13,208 |
18,919 |
20,617 |
Statement 2: Invisibles Receipts by Category of Transactions (Concld.) |
(US $ million) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08R |
2008-09 PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
iii) Gold and silver brought through passenger baggage |
13 |
10 |
13 |
18 |
19 |
27 |
16 |
27 |
26 |
19 |
iv) Personal gifts/donations to charitable/religious institutions in India. |
734 |
581 |
623 |
613 |
1,199 |
2,168 |
2,026 |
2,860 |
2,644 |
2,381 |
Total (i to iv) |
12,290 |
13,065 |
15,760 |
17,189 |
22,182 |
21,075 |
24,951 |
30,835 |
43,508 |
46,903 |
C) Income Account |
1,931 |
2,682 |
3,379 |
3,522 |
3,904 |
4,593 |
6,408 |
9,308 |
14,272 |
14,309 |
1) Compensation of Employees |
|
|
|
|
|
|
|
|
|
|
i) Wages received by Indians working on foreign contracts |
148 |
128 |
125 |
117 |
130 |
469 |
179 |
382 |
461 |
825 |
2) Investment Income |
|
|
|
|
|
|
|
|
|
|
i) Interest received on loans to Non-residents |
59 |
84 |
201 |
154 |
198 |
65 |
101 |
163 |
1,467 |
951 |
ii) Dividend/profit received by Indians on foreign investment |
16 |
11 |
57 |
34 |
40 |
92 |
225 |
450 |
476 |
401 |
Of which: |
|
|
|
|
|
|
|
|
|
|
Dividend received by Indians on foreign investment |
# |
# |
# |
# |
# |
44 |
28 |
137 |
131 |
167 |
Profit received by Indians on foreign investment |
# |
# |
# |
# |
# |
48 |
197 |
313 |
345 |
234 |
iii) Reinvested Earnings |
0 |
340 |
700 |
1,104 |
552 |
248 |
1,092 |
1,076 |
1,084 |
1,083 |
iv) Interest received on debentures, FRNs, CPs, fixed deposits and funds held abroad by ADs out of foreign currency loans/ export proceeds |
11 |
18 |
13 |
14 |
31 |
182 |
104 |
64 |
106 |
83 |
v) Interest received on overdraft of VOSTRO accounts of foreign correspondents/ branches by the ADs |
10 |
6 |
30 |
40 |
95 |
333 |
110 |
262 |
227 |
229 |
vi) Payment of taxes by the Non-residents/refund of taxes by foreign governments to Indians |
195 |
70 |
131 |
21 |
157 |
173 |
58 |
257 |
322 |
253 |
vii) Interest/discount earnings etc. earnings on RBI investment |
1,383 |
1,950 |
1,757 |
1,835 |
2,115 |
3,014 |
4,519 |
6,641 |
10,124 |
10,480 |
viii) Interest/remuneration on SDR holdings |
9 |
8 |
7 |
13 |
10 |
17 |
20 |
13 |
4 |
3 |
ix) Others |
100 |
67 |
358 |
190 |
576 |
0 |
0 |
0 |
0 |
0 |
Total ( i to ix) |
1,783 |
2,554 |
3,254 |
3,405 |
3,774 |
4,124 |
6,229 |
8926 |
13,808 |
13,483 |
Statement 3: Invisibles Payments by Category of Transactions |
(US $ million) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08R |
2008-09PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
Invisibles Payments (A+B+C ) |
17,169 |
22,473 |
21,763 |
24,890 |
25,707 |
38,301 |
47,685 |
62,341 |
73,144 |
73,612 |
A) Services |
11,645 |
14,576 |
13,816 |
17,120 |
16,724 |
27,823 |
34,489 |
44,311 |
51,490 |
52,047 |
1) Travel Account |
|
|
|
|
|
|
|
|
|
|
i) Business |
1,268 |
1,586 |
1,471 |
1,987 |
2,712 |
3,222 |
3,452 |
2,822 |
3,296 |
1,908 |
ii) Health Related |
3 |
4 |
4 |
4 |
6 |
14 |
38 |
13 |
18 |
25 |
iii)Education Related |
61 |
95 |
249 |
169 |
237 |
642 |
1,114 |
1,105 |
2,826 |
2,247 |
iv) Basic Travel Quota ( BTQ) |
379 |
381 |
518 |
796 |
449 |
1,164 |
1,240 |
1,800 |
1,967 |
2,399 |
v) Pilgrimage |
137 |
187 |
113 |
125 |
16 |
31 |
27 |
117 |
88 |
174 |
vi) Others |
291 |
551 |
659 |
260 |
182 |
176 |
767 |
827 |
1,063 |
2,671 |
Total (i to vi) |
2,139 |
2,804 |
3,014 |
3,341 |
3,602 |
5,249 |
6,638 |
6,684 |
9,258 |
9,425 |
2) Transportation Account |
|
|
|
|
|
|
|
|
|
|
a) Sea Transport |
|
|
|
|
|
|
|
|
|
|
i) Surplus remitted by Foreign companies operating in India |
387 |
408 |
474 |
330 |
148 |
1,009 |
1,636 |
1,913 |
1,663 |
1,838 |
ii) Operating expenses of Indian companies abroad |
406 |
831 |
446 |
505 |
364 |
333 |
1,005 |
551 |
901 |
1,014 |
iii) Charter hire charges |
116 |
157 |
112 |
111 |
100 |
87 |
83 |
84 |
148 |
128 |
iv) Freight on imports |
@ |
@ |
@ |
@ |
@ |
876 |
1,504 |
1,347 |
2,952 |
4,064 |
v) Freight on exports |
.. |
.. |
.. |
.. |
.. |
519 |
581 |
710 |
779 |
1,026 |
vi) Remittance of passage booking abroad |
# |
# |
# |
# |
# |
26 |
12 |
5 |
4 |
7 |
b) Air Transport |
|
|
|
|
|
|
|
|
|
|
i) Surplus remitted by Foreign companies operating in India |
821 |
1,236 |
1,362 |
1,410 |
652 |
1,147 |
2,194 |
1,835 |
2,637 |
2,376 |
ii) Operating expenses of Indian companies abroad |
134 |
98 |
111 |
112 |
132 |
102 |
286 |
240 |
565 |
674 |
iii) Charter hire charges |
75 |
73 |
70 |
82 |
60 |
48 |
141 |
239 |
513 |
387 |
iv) Freight on imports |
@ |
@ |
@ |
@ |
@ |
118 |
125 |
176 |
556 |
271 |
v) Freight on exports |
.. |
.. |
.. |
.. |
.. |
59 |
41 |
32 |
27 |
16 |
vi) Remittance of passage booking abroad |
# |
# |
# |
# |
# |
31 |
8 |
13 |
25 |
38 |
c. Freight on imports |
304 |
647 |
732 |
600 |
763 |
@@ |
@@ |
@@ |
@@ |
@@ |
d. Remittance of passage booking abroad |
24 |
12 |
29 |
17 |
11 |
## |
## |
## |
## |
## |
e. Others |
143 |
96 |
131 |
105 |
98 |
184 |
721 |
923 |
743 |
981 |
Total (a to e) |
2,410 |
3,558 |
3,467 |
3,272 |
2,328 |
4,539 |
8,337 |
8,068 |
11,514 |
12,820 |
3) Insurance Account |
|
|
|
|
|
|
|
|
|
|
a. Premium |
|
|
|
|
|
|
|
|
|
|
i) Life |
1 |
0 |
0 |
0 |
1 |
10 |
15 |
28 |
102 |
77 |
ii) Non-life |
10 |
9 |
25 |
5 |
10 |
336 |
243 |
82 |
128 |
100 |
iii) Reinsurance |
76 |
180 |
178 |
295 |
266 |
299 |
581 |
382 |
567 |
530 |
b. Commission on Business |
6 |
0 |
3 |
0 |
0 |
12 |
28 |
23 |
27 |
43 |
c. Others |
29 |
34 |
74 |
50 |
86 |
65 |
249 |
127 |
220 |
381 |
Total (a to c) |
122 |
223 |
280 |
350 |
363 |
722 |
1,116 |
642 |
1,044 |
1,130 |
Statement 3: Invisibles Payments by Category of Transactions (Contd.) |
(US $ million) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
4) Government Not Included Elsewhere |
|
|
|
|
|
|
|
|
|
|
a. Maintenance of Indianembassies and diplomatic missions abroad |
237 |
262 |
209 |
195 |
186 |
339 |
445 |
285 |
272 |
646 |
b. Remittances by foreign embassies and missions in India |
33 |
57 |
74 |
33 |
26 |
72 |
84 |
118 |
104 |
147 |
Total (a to b) |
270 |
319 |
283 |
228 |
212 |
411 |
529 |
403 |
376 |
793 |
5) Miscellaneous Account |
|
|
|
|
|
|
|
|
|
|
a) Communication services |
190 |
127 |
370 |
965 |
772 |
738 |
289 |
796 |
860 |
1,087 |
b) Construction services |
51 |
166 |
517 |
1,326 |
655 |
716 |
723 |
737 |
707 |
896 |
c) Financial services |
1,632 |
1,973 |
1,264 |
1,388 |
700 |
832 |
965 |
2,991 |
3,133 |
2,958 |
d) Software services |
138 |
591 |
672 |
737 |
476 |
800 |
1,338 |
2,267 |
3,358 |
2,814 |
e) News agency services |
90 |
256 |
163 |
232 |
235 |
281 |
130 |
226 |
506 |
385 |
f) Royalties, copyright and license fees |
311 |
235 |
361 |
352 |
444 |
712 |
594 |
1,030 |
1,037 |
1,722 |
g) Business services (i to xii)$ |
1,152 |
1,022 |
1,501 |
1,812 |
2,550 |
7,318 |
7,748 |
15,866 |
16,553 |
15,435 |
i) Merchanting services |
|
|
|
|
|
235 |
123 |
295 |
717 |
735 |
ii) Trade related services |
|
|
|
|
|
1,052 |
1,207 |
1,801 |
2,286 |
1,651 |
iii) Operational Leasing Services |
|
|
|
|
|
355 |
462 |
941 |
1,166 |
1,012 |
iv) Legal services |
|
|
|
|
|
73 |
82 |
161 |
482 |
336 |
v) Accounting / Auditing services |
|
|
|
|
|
13 |
20 |
58 |
69 |
132 |
vi) Business Management & Consultancy services |
795 |
546 |
533 |
648 |
814 |
1,279 |
1,806 |
3,486 |
3,422 |
3,530 |
vii) Advertising/ trade fair |
|
|
|
|
|
514 |
420 |
1,786 |
1,302 |
912 |
viii) Research & Development services |
|
|
|
|
|
57 |
116 |
201 |
405 |
432 |
ix) Architectural Engineering & other technical services |
|
|
|
|
|
1,111 |
1,414 |
3,025 |
3,091 |
3,130 |
x) Agricultural Mining & on-site processing services |
|
|
|
|
|
7 |
15 |
74 |
50 |
169 |
xi) Maintenance of offices abroad services |
357 |
476 |
968 |
1,164 |
1,736 |
2,618 |
2,074 |
4,032 |
3,555 |
3,387 |
xii) Environmental services |
|
|
|
|
|
4 |
9 |
6 |
9 |
9 |
h) Personal, Cultural & Recreational services |
|
|
|
|
|
102 |
84 |
117 |
211 |
322 |
i) Refunds/rebates |
89 |
64 |
150 |
152 |
365 |
762 |
45 |
365 |
561 |
550 |
j) Other services$$ |
3,051 |
3,238 |
1,774 |
2,965 |
4,022 |
4,641 |
5,953 |
4,119 |
2,372 |
1,707 |
Total (a to j) |
6,704 |
7,672 |
6,772 |
9,929 |
10,219 |
16,902 |
17,869 |
28,514 |
29,298 |
27,879 |
B) Transfers |
34 |
211 |
362 |
802 |
574 |
906 |
933 |
1,391 |
2,316 |
2,749 |
1) Official Transfers |
|
|
|
|
|
|
|
|
|
|
i) Grants/donations from official sector |
0 |
0 |
0 |
0 |
0 |
356 |
475 |
381 |
514 |
413 |
Total |
0 |
0 |
0 |
0 |
0 |
356 |
475 |
381 |
514 |
413 |
2) Private Transfers |
|
|
|
|
|
|
|
|
|
|
i) Remittance by Non-residents towards family maintenance and savings |
29 |
124 |
292 |
757 |
522 |
421 |
354 |
823 |
1,585 |
1,928 |
ii) Personal gifts/donations to charitable/religious institutions |
5 |
87 |
70 |
45 |
52 |
129 |
104 |
187 |
216 |
409 |
Statement 3: Invisibles Payments by Category of Transactions (Concld.) |
(US $ million) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08 R |
2008-09 PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
Of which: |
|
|
|
|
|
|
|
|
|
|
iii) Remittance towards personal gifts and donations |
|
|
|
|
|
108 |
96 |
157 |
182 |
373 |
iv) Remittance towards donations to religious & charitable institutions abroad |
|
|
|
|
|
17 |
7 |
18 |
24 |
24 |
v) Remittance towards grants and donations to other governments & charitable institutions established by the governments |
|
|
|
|
|
4 |
1 |
12 |
10 |
12 |
Total (i to v) |
34 |
211 |
362 |
802 |
574 |
550 |
458 |
1,010 |
1,802 |
2,336 |
C) Income |
5,490 |
7,686 |
7,585 |
6,968 |
8,409 |
9,572 |
12,263 |
16,639 |
19,339 |
18,816 |
a) Compensation of Employees |
|
|
|
|
|
|
|
|
|
|
i) Payment of wages/ salary to Non-residents working in India |
12 |
468 |
487 |
598 |
878 |
1,353 |
772 |
951 |
1,095 |
1,309 |
Total |
12 |
468 |
487 |
598 |
878 |
1,353 |
772 |
951 |
1,095 |
1,309 |
b) Investment Income |
|
|
|
|
|
|
|
|
|
|
i) Payment of interest on NRI deposits |
1,742 |
1,811 |
1,808 |
1,413 |
1,642 |
1,353 |
1,497 |
1,969 |
1,813 |
1,547 |
ii) Payment of interest on loans from Non-residents |
3,037 |
2,930 |
2,855 |
2,594 |
3,469 |
2,450 |
4,320 |
3,792 |
5,062 |
5,268 |
iii) Payment of dividend/profit to Non-resident share holders |
537 |
1,047 |
712 |
462 |
878 |
1,991 |
2,502 |
3,486 |
3,226 |
3,171 |
Of which: |
|
|
|
|
|
|
|
|
|
|
Payment of dividend to Non-resident share holder |
|
|
|
|
|
1,578 |
2,400 |
3,235 |
2,998 |
2,893 |
Payment of profit to Non-resident share holder |
|
|
|
|
|
413 |
102 |
251 |
228 |
278 |
iv) Reinvested Earning |
0 |
1,352 |
1,644 |
1,832 |
1,460 |
1,904 |
2,760 |
5,828 |
7,680 |
6,426 |
v) Payment of interest on debentures, FRNs, CPs, fixed deposits, Government securities etc. |
119 |
60 |
23 |
43 |
42 |
170 |
100 |
35 |
57 |
120 |
vi) Charges on SDRs |
30 |
16 |
52 |
20 |
16 |
19 |
17 |
30 |
21 |
28 |
vii) Interest paid on overdraft on VOSTRO a/c Holders/ OD on NOSTRO a/c |
0 |
0 |
0 |
4 |
20 |
255 |
212 |
406 |
238 |
510 |
ix) Payment of taxes by the Indians/refund of taxes by government to |
|
|
|
|
|
|
|
|
|
|
Non-residents |
13 |
2 |
4 |
2 |
4 |
77 |
83 |
142 |
148 |
436 |
Total (i to ix) |
5,478 |
7,218 |
7,098 |
6,370 |
7,531 |
8,219 |
11,491 |
15,688 |
18,244 |
17,506 |
R : Revised. PR : Partially Revised.
@ : For the period prior to 2004-05, the break up of ‘freight on imports’ between the sea transport and the air transport is not separately
available. Therefore, these have been included under the head ‘freight on imports’.
+ : The category ‘freight on exports’ was introduced in 2004-05 with a view to improve the data coverage.
# : For the period prior to 2004-05, the break up between the sea transport and the air transport is not separately available. Therefore,
these have been included under the head ‘remittance on passage booking abroad’.
@@ : Included under the heads ‘sea transport’ and ‘air transport’.
## : Included under the heads ‘sea transport’ and ‘air transport’.
$ : These new categories of services are available since 2004-05 as the reporting system was put in place to record such transactions.
$$ : Till 2003-04, others included advertising, rentals, office maintenance, prizes, exhibitions & other services not included elsewhere. |
Statement 4: Invisibles by Category |
(Rs. crore) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
I. |
Invisibles Receipts (A+B+C) |
1,31,449 |
1,47,778 |
1,75,108 |
2,02,757 |
2,45,413 |
3,11,550 |
3,97,660 |
5,17,146 |
5,98,088 |
7,50,333 |
|
A. Services |
68,137 |
74,555 |
81,739 |
1,00,419 |
1,23,175 |
1,93,711 |
2,55,668 |
3,33,093 |
3,63,042 |
4,67,915 |
|
1) Travel |
13,166 |
16,064 |
14,975 |
15,991 |
23,054 |
29,858 |
34,871 |
41,127 |
45,526 |
50,226 |
|
2) Transportation |
7,400 |
9,364 |
10,326 |
12,261 |
14,714 |
21,021 |
28,023 |
36,049 |
40,199 |
51,952 |
|
3) Insurance |
1,004 |
1,234 |
1,374 |
1,783 |
1,922 |
3,913 |
4,694 |
5,403 |
6,586 |
6,518 |
|
4) GNIE |
2,523 |
2,986 |
2,467 |
1,417 |
1,105 |
1,797 |
1,396 |
1,143 |
1,331 |
1,771 |
|
5) Miscellaneous |
44,044 |
44,907 |
52,597 |
68,967 |
82,380 |
1,37,122 |
1,86,684 |
2,49,371 |
2,69,400 |
3,57,447 |
|
Of which: |
|
|
|
|
|
|
|
|
|
|
|
Software Services |
17,412 |
29,013 |
36,038 |
46,424 |
58,781 |
79,404 |
1,04,632 |
1,41,356 |
1,62,020 |
2,12,242 |
|
B. Transfers |
54,939 |
60,948 |
77,289 |
85,289 |
1,04,329 |
97,201 |
1,13,566 |
1,42,037 |
1,77,745 |
2,16,906 |
|
1) Official Transfers |
1,659 |
1,156 |
2,197 |
2,174 |
2,531 |
2,762 |
2,970 |
2,864 |
3,024 |
3,029 |
|
2) Private Transfers |
53,280 |
59,792 |
75,092 |
83,115 |
101,798 |
94,439 |
110,596 |
1,39,173 |
1,74,721 |
2,13,877 |
|
C. Income |
8,373 |
12,275 |
16,080 |
17,049 |
17,909 |
20,638 |
28,426 |
42,016 |
57,300 |
65,512 |
|
1) Investment Income |
7,727 |
11,690 |
15,487 |
16,484 |
17,314 |
18,538 |
27,633 |
40,297 |
55,451 |
61,722 |
|
2) Compensation of |
|
|
|
|
|
|
|
|
|
|
|
Employees |
646 |
585 |
593 |
565 |
595 |
2,100 |
793 |
1,719 |
1,849 |
3,790 |
II. |
Invisibles Payments (A+B+C) |
74,421 |
1,02,639 |
1,03,727 |
1,20,400 |
1,18,044 |
1,71,959 |
2,11,733 |
2,81,567 |
2,93,902 |
3,38,789 |
|
A. Services |
50,467 |
66,650 |
65,850 |
82,775 |
76,794 |
1,24,880 |
1,53,057 |
2,00,029 |
2,06,798 |
2,39,606 |
|
1) Travel |
9,268 |
12,741 |
14,336 |
16,155 |
16,534 |
23,571 |
29,432 |
30,249 |
37,191 |
43,336 |
|
2) Transportation |
10,450 |
16,172 |
16,486 |
15,828 |
10,688 |
20,363 |
36,928 |
36,504 |
46,278 |
58,531 |
|
3) Insurance |
525 |
1,004 |
1,339 |
1,687 |
1,672 |
3,249 |
4,965 |
2,903 |
4,192 |
5,230 |
|
4) GNIE |
1,167 |
1,460 |
1,349 |
1,105 |
976 |
1,843 |
2,343 |
1,825 |
1,518 |
3,777 |
|
5) Miscellaneous |
29,057 |
35,273 |
32,340 |
48,000 |
46,924 |
75,854 |
79,389 |
1,28,548 |
1,17,618 |
1,28,731 |
|
Of which: |
|
|
|
|
|
|
|
|
|
|
|
Software Services |
1,600 |
2,705 |
3,202 |
3,565 |
2,175 |
3,579 |
5,954 |
10,212 |
13,494 |
12,702 |
|
B. Transfers |
150 |
981 |
1,729 |
3,886 |
2,633 |
4,066 |
4,134 |
6,288 |
9,293 |
12,568 |
|
1) Official Transfers |
2 |
0 |
0 |
0 |
0 |
1,598 |
2,103 |
1,723 |
2,073 |
1,900 |
|
2) Private Transfers |
148 |
981 |
1,729 |
3,886 |
2,633 |
2,468 |
2,031 |
4,565 |
7,220 |
10,668 |
|
C. Income |
23,804 |
35,008 |
36,148 |
33,739 |
38,617 |
43,013 |
54,542 |
75,250 |
77,811 |
86,615 |
|
1) Investment Income |
23,747 |
32,885 |
33,830 |
30,847 |
34,586 |
36,947 |
51,112 |
70,955 |
73,410 |
80,597 |
|
2) Compensation of |
|
|
|
|
|
|
|
|
|
|
|
Employees |
57 |
2,123 |
2,318 |
2,892 |
4,031 |
6,066 |
3,430 |
4,295 |
4,402 |
6,018 |
Net Invisibles (I-II) |
57,028 |
45,139 |
71,381 |
82,357 |
1,27,369 |
1,39,591 |
1,85,927 |
2,35,579 |
3,04,185 |
4,11,544 |
R : Revised. PR : Partially Revised. |
Statement 5: Invisibles Receipts by Category of Transactions |
(Rs. crore) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
Invisibles Receipts (A+B+C) |
1,31,449 |
1,47,778 |
1,75,108 |
2,02,757 |
2,45,413 |
3,11,550 |
3,97,660 |
5,17,146 |
5,98,088 |
7,50,333 |
A) Services |
68,137 |
74,555 |
81,739 |
1,00,419 |
1,23,175 |
1,93,711 |
2,55,668 |
3,33,093 |
3,63,042 |
4,67,915 |
1) Travel Account |
|
|
|
|
|
|
|
|
|
|
i) Tourist Expenses in India |
13,166 |
16,064 |
14,975 |
15,991 |
23,054 |
29,858 |
34,871 |
41,127 |
45,526 |
50,226 |
Total |
13,166 |
16,064 |
14,975 |
15,991 |
23,054 |
29,858 |
34,871 |
41,127 |
45,526 |
50,226 |
2) Transportation Account |
|
|
|
|
|
|
|
|
|
|
a ) Sea Transport |
|
|
|
|
|
|
|
|
|
|
i) Surplus remitted byIndian companies operating abroad |
262 |
157 |
344 |
241 |
170 |
932 |
2,000 |
2,038 |
2,037 |
2,696 |
ii) Operating expenses of foreign companies in India |
696 |
398 |
495 |
695 |
1,325 |
2,075 |
2,824 |
4,181 |
3,105 |
4,706 |
iii) Charter hire charges |
181 |
453 |
407 |
401 |
433 |
217 |
637 |
435 |
832 |
874 |
b) Air Transport |
|
|
|
|
|
|
|
|
|
|
i) Surplus remitted by Indian companies operating abroad |
781 |
851 |
739 |
820 |
444 |
589 |
885 |
1,389 |
2,751 |
2,039 |
ii) Operating expenses of foreign companies in India |
87 |
94 |
44 |
21 |
84 |
479 |
165 |
375 |
625 |
589 |
iii) Charter hire charges |
103 |
19 |
85 |
21 |
81 |
82 |
93 |
156 |
167 |
90 |
c) Freight on exports |
4,617 |
6,670 |
7,053 |
8,775 |
11,329 |
16,445 |
19,524 |
24,791 |
27,796 |
34,447 |
d) Others |
673 |
722 |
1,159 |
1,287 |
848 |
202 |
1,895 |
2,684 |
2,888 |
6,512 |
Total (a to d) |
7,400 |
9,364 |
10,326 |
12,261 |
14,714 |
21,021 |
28,023 |
36,049 |
40,199 |
51,952 |
3) Insurance Account |
|
|
|
|
|
|
|
|
|
|
a) Insurance on export |
832 |
1,111 |
1,179 |
1,466 |
1,711 |
2,148 |
2,548 |
3,243 |
3,874 |
4,780 |
b) Premium |
|
|
|
|
|
|
|
|
|
|
i) Life |
3 |
4 |
26 |
101 |
3 |
114 |
166 |
294 |
393 |
269 |
ii) Non-life |
31 |
24 |
32 |
28 |
54 |
1,302 |
346 |
514 |
534 |
361 |
iii) Reinsurance from |
|
|
|
|
|
|
|
|
|
|
foreign companies |
43 |
18 |
40 |
76 |
40 |
87 |
876 |
366 |
738 |
385 |
c) Commission on Business received from foreigncompanies |
2 |
7 |
15 |
18 |
23 |
131 |
375 |
358 |
501 |
243 |
d) Others |
93 |
70 |
82 |
94 |
91 |
131 |
383 |
628 |
546 |
479 |
Total (a to d) |
1,004 |
1,234 |
1,374 |
1,783 |
1,922 |
3,913 |
4,694 |
5,403 |
6,586 |
6,518 |
4) Government Not Included Elsewhere |
|
|
|
|
|
|
|
|
|
|
a) Maintenance of foreign embassies and diplomatic missions in India |
887 |
1,019 |
935 |
860 |
850 |
1,025 |
923 |
625 |
796 |
1,187 |
b) Maintenance of international and regional institutions in India |
1,636 |
1,967 |
1,532 |
557 |
255 |
772 |
473 |
518 |
535 |
584 |
Total (a to b) |
2,523 |
2,986 |
2,467 |
1,417 |
1,105 |
1,797 |
1,396 |
1,143 |
1,331 |
1,771 |
Statement 5: Invisibles Receipts by Category of Transactions (Contd.) |
(Rs. crore) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
5) Miscellaneous Account |
|
|
|
|
|
|
|
|
|
|
a) Communication services |
4,601 |
5,262 |
3,585 |
3,931 |
4,535 |
6,191 |
7,000 |
10,227 |
9,682 |
9,903 |
b) Construction services |
1,691 |
2,430 |
696 |
863 |
2,097 |
2,184 |
1,074 |
3,156 |
3,056 |
4,053 |
c) Financial services |
1,569 |
1,577 |
1,387 |
3,276 |
1,372 |
2,279 |
5,355 |
14,010 |
12,917 |
18,060 |
d) Software services |
17,412 |
29,013 |
36,038 |
46,424 |
58,781 |
79,404 |
1,04,632 |
1,41,356 |
1,62,020 |
2,12,242 |
of which: IT Services |
14,929 |
24,758 |
28,908 |
34,334 |
42,249 |
58,768 |
76,667 |
1,03,484 |
1,18,366 |
43,884 |
ITES-BPO |
2,483 |
4,255 |
7,130 |
12,090 |
16,532 |
20,636 |
27,965 |
37,872 |
1,54,537 |
58,411 |
e) News agency services |
1,485 |
511 |
43 |
284 |
321 |
769 |
818 |
1,509 |
2,035 |
3,683 |
f) Royalties, copyright andlicense fees |
237 |
272 |
104 |
111 |
146 |
316 |
862 |
435 |
631 |
610 |
g) Business services (1 to 12)$ |
2,790 |
1,522 |
2,464 |
3,890 |
5,937 |
23,067 |
41,356 |
65,738 |
67,430 |
75,632 |
i) Merchanting services |
|
|
|
|
|
1,248 |
1,725 |
1,071 |
1,680 |
4,887 |
ii) Trade related services |
|
|
|
|
|
1,923 |
2,310 |
5,960 |
8,956 |
9,194 |
iii) Operational Leasing Services |
|
|
|
|
|
123 |
476 |
451 |
1,900 |
2,156 |
iv) Legal services |
|
|
|
|
|
1,126 |
1,230 |
2,736 |
2,824 |
3,306 |
v) Accounting / Auditing services |
|
|
|
|
|
170 |
302 |
795 |
918 |
1,066 |
vi) Business Management & Consultancy services |
2,790 |
1,522 |
2,464 |
3,890 |
5,937 |
6,955 |
10,285 |
20,231 |
17,841 |
23,031 |
vii) Advertising/ trade fair |
|
|
|
|
|
726 |
1,528 |
3,122 |
2,869 |
2,347 |
viii) Research & Development services |
|
|
|
|
|
985 |
1,754 |
3,430 |
5,338 |
6,308 |
ix) Architectural Engineering & other technical services |
|
|
|
|
|
6,325 |
14,163 |
15,678 |
12,689 |
8,113 |
x) Agricultural Mining & on-site processing services |
|
|
|
|
|
236 |
143 |
217 |
227 |
397 |
xi) Maintenance of offices abroad services |
|
|
|
|
|
3,227 |
7,051 |
11,924 |
11,489 |
13,912 |
xii) Environmental services |
|
|
|
|
|
23 |
389 |
125 |
700 |
917 |
h) Personal, Cultural & Recreational services |
|
|
|
|
|
466 |
838 |
1,094 |
2,249 |
3,399 |
i) Refunds/rebates |
231 |
238 |
258 |
213 |
234 |
1,716 |
332 |
1,312 |
1,083 |
1,351 |
j) Other services$$ |
14,028 |
4,082 |
8,022 |
9,975 |
8,957 |
20,730 |
24,417 |
10,532 |
8,296 |
28,515 |
Total (a to j) |
44,044 |
44,907 |
52,597 |
68,967 |
82,380 |
1,37,122 |
1,86,684 |
2,49,371 |
2,69,400 |
3,57,448 |
B) Transfers |
54,939 |
60,948 |
77,289 |
85,289 |
1,04,329 |
97,201 |
1,13,566 |
1,42,037 |
1,77,745 |
2,16,906 |
1) Official Transfers |
|
|
|
|
|
|
|
|
|
|
i) Donations received from Non-residents |
174 |
393 |
211 |
156 |
413 |
256 |
236 |
281 |
270 |
265 |
ii) Grant under PL 480 II |
414 |
439 |
323 |
280 |
153 |
135 |
169 |
142 |
113 |
34 |
iii) Grants from other Governments |
1,071 |
324 |
1,663 |
1,738 |
1,965 |
2,371 |
2,565 |
2,441 |
2,641 |
2,730 |
Total (i to iii) |
1,659 |
1,156 |
2,197 |
2,174 |
2,531 |
2,762 |
2,970 |
2,864 |
3,024 |
3,029 |
Statement 5: Invisibles Receipts by Category of Transactions (Concld.) |
(Rs. crore) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
2) Private Transfers |
|
|
|
|
|
|
|
|
|
|
i) Inward remittance from Indian workers abroad forfamily maintenance etc. |
32,192 |
35,507 |
31,361 |
47,915 |
47,648 |
44,559 |
46,290 |
73,518 |
88,049 |
1,08,598 |
ii) Local withdrawals/ redemptions from non-resident deposits |
17,849 |
21,577 |
40,654 |
32,147 |
48,565 |
40,105 |
55,269 |
59,594 |
75,968 |
94,315 |
iii) Gold and silver brought through passenger baggage |
57 |
44 |
61 |
89 |
86 |
118 |
69 |
121 |
106 |
86 |
iv) Personal gifts/donations to charitable/religious institutions in India. |
3,182 |
2,664 |
3,016 |
2,964 |
5,499 |
9,657 |
8,968 |
5,940 |
10,598 |
10,878 |
Total (i to iv) |
53,280 |
59,792 |
75,092 |
83,115 |
101,798 |
94,439 |
1,10,596 |
1,39,173 |
1,74,721 |
2,13,877 |
C) Income Account |
8,373 |
12,275 |
16,080 |
17,049 |
17,909 |
20,638 |
28,426 |
42,016 |
57,300 |
65,512 |
1) Compensation of Employees |
|
|
|
|
|
|
|
|
|
|
i) Wages received by Indians working on foreign contracts |
646 |
585 |
593 |
565 |
595 |
2,100 |
793 |
1,719 |
1,849 |
3,790 |
2) Investment Income |
|
|
|
|
|
|
|
|
|
|
i) Interest received on loans to Non-residents |
256 |
384 |
959 |
745 |
910 |
293 |
449 |
739 |
5,895 |
4,405 |
ii) Dividend/profit received by Indians on foreign investment |
68 |
54 |
273 |
64 |
184 |
407 |
992 |
2,036 |
1,908 |
1,852 |
Of which: |
|
|
|
|
|
|
|
|
|
|
Dividend received by Indians on foreign investment |
# |
# |
# |
# |
# |
194 |
122 |
618 |
526 |
790 |
Profit received by Indians on foreign investment |
# |
# |
# |
# |
# |
213 |
870 |
1,418 |
1,382 |
1,062 |
iii) Reinvested Earning |
0 |
1,553 |
3,339 |
5,342 |
2,536 |
1,114 |
4,835 |
4,869 |
4,364 |
4,982 |
iv) Interest received on debentures, FRNs, CPs,fixed deposits and funds held abroad by ADs out of foreign currency loans/ export proceeds |
50 |
86 |
63 |
69 |
137 |
813 |
453 |
289 |
422 |
389 |
v) Interest received on overdraft of VOSTRO accounts of foreign correspondents/ branches by the ADs |
38 |
26 |
3 |
5 |
1 |
1,518 |
488 |
1,177 |
907 |
1,055 |
vi) Payment of taxes by the Non-residents/refund of taxes by foreign governments to Indians |
854 |
313 |
626 |
100 |
720 |
774 |
256 |
1,148 |
1,291 |
1,164 |
vii) Interest/discount earnings etc. earnings on RBI investment |
5,992 |
8,927 |
8,344 |
8,885 |
9,708 |
13,543 |
20,070 |
29,980 |
40,648 |
47,856 |
viii)Interest/remuneration on SDR holdings |
37 |
35 |
37 |
64 |
46 |
76 |
90 |
59 |
16 |
14 |
ix) Others |
432 |
312 |
1,843 |
1,210 |
3,072 |
0 |
0 |
0 |
0 |
0 |
Total ( i to ix) |
7,727 |
11,690 |
15,487 |
16,484 |
17,314 |
18,538 |
27,633 |
40,297 |
55,451 |
61,722 |
Statement 6: Invisibles Payments by Category of Transactions |
(Rs. crore) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
Invisibles Payments (A+B+C ) |
74,421 |
1,02,639 |
1,03,727 |
1,20,400 |
1,18,044 |
1,71,959 |
2,11,733 |
2,81,567 |
2,93,902 |
3,38,789 |
A) Services |
50,467 |
66,650 |
65,850 |
82,775 |
76,794 |
1,24,880 |
1,53,057 |
2,00,029 |
2,06,798 |
2,39,606 |
1) Travel Account |
|
|
|
|
|
|
|
|
|
|
i) Business |
5,490 |
7,200 |
7,001 |
9,617 |
12,449 |
14,451 |
15,296 |
12,758 |
13,268 |
15,887 |
ii) Health Related |
13 |
18 |
18 |
18 |
26 |
59 |
167 |
61 |
71 |
116 |
iii)Education Related |
263 |
435 |
1,182 |
818 |
1,082 |
2,892 |
4,921 |
5,009 |
11,304 |
10,369 |
iv) Basic Travel Quota ( BTQ) |
1,638 |
1,738 |
2,465 |
3,830 |
2,063 |
5,226 |
5,473 |
8,154 |
7,928 |
10,961 |
v) Pilgrimage |
602 |
867 |
541 |
604 |
72 |
144 |
122 |
527 |
352 |
827 |
vi) Others |
1,262 |
2,483 |
3,129 |
1,268 |
842 |
799 |
3,453 |
3,740 |
4,269 |
5,177 |
Total (i to vi) |
9,268 |
12,741 |
14,336 |
16,155 |
16,534 |
23,571 |
29,432 |
30,249 |
37,191 |
43,336 |
2) Transportation Account |
|
|
|
|
|
|
|
|
|
|
a) Sea Transport |
|
|
|
|
|
|
|
|
|
|
i) Surplus remitted by Foreign companies operating in India |
1,681 |
1,872 |
2,245 |
1,603 |
683 |
4,529 |
7,274 |
8,640 |
6,685 |
8,313 |
ii) Operating expenses of Indian companies abroad |
1,757 |
3,736 |
2,125 |
2,439 |
1,670 |
1,493 |
4,455 |
2,486 |
3,627 |
4,634 |
iii) Charter hire charges |
501 |
700 |
534 |
540 |
459 |
389 |
369 |
383 |
595 |
578 |
iv) Freight on imports |
@ |
@ |
@ |
@ |
@ |
3,924 |
6,659 |
6,076 |
11,851 |
18,507 |
v) Freight on exports |
.. |
.. |
.. |
.. |
.. |
2,328 |
2,573 |
3,210 |
3,128 |
4,673 |
vi) Remittance of passage booking abroad |
# |
# |
# |
# |
# |
114 |
53 |
25 |
17 |
30 |
b) Air Transport |
|
|
|
|
|
|
|
|
|
|
i) Surplus remitted by Foreign companies operating in India |
3,561 |
5,632 |
6,477 |
6,827 |
2,999 |
5,156 |
9,683 |
8,320 |
10,632 |
10,814 |
ii) Operating expenses of Indian companies abroad |
580 |
444 |
529 |
539 |
611 |
459 |
1,268 |
1,086 |
2,267 |
3,146 |
iii) Charter hire charges |
324 |
336 |
333 |
391 |
280 |
217 |
626 |
1,077 |
2,063 |
1,780 |
iv) Freight on imports |
@ |
@ |
@ |
@ |
@ |
528 |
557 |
792 |
2,222 |
1,255 |
v) Freight on exports |
.. |
.. |
.. |
.. |
.. |
264 |
180 |
144 |
110 |
73 |
vi) Remittance of passage booking abroad |
# |
# |
# |
# |
# |
138 |
37 |
58 |
102 |
177 |
c. Freight on imports |
1,317 |
2,970 |
3,482 |
2,895 |
3,503 |
@@ |
@@ |
@@ |
@@ |
@@ |
d. Remittance of passage booking abroad |
104 |
52 |
136 |
80 |
48 |
## |
## |
## |
## |
## |
e. Others |
625 |
430 |
625 |
514 |
435 |
824 |
3,192 |
4,207 |
2,978 |
9,298 |
Total (a to e) |
10,450 |
16,172 |
16,486 |
15,828 |
10,688 |
20,363 |
36,928 |
36,504 |
46,278 |
58,531 |
3) Insurance Account |
|
|
|
|
|
|
|
|
|
|
a. Premium |
|
|
|
|
|
|
|
|
|
|
i) Life |
3 |
1 |
3 |
2 |
4 |
42 |
64 |
128 |
409 |
346 |
ii) Non-life |
45 |
37 |
123 |
22 |
47 |
1,511 |
1,076 |
372 |
512 |
449 |
iii) Reinsurance |
328 |
805 |
850 |
1,421 |
1,224 |
1,350 |
2,588 |
1,729 |
2,278 |
2,467 |
b. Commission on Business |
24 |
1 |
15 |
3 |
2 |
54 |
124 |
103 |
108 |
194 |
c. Others |
125 |
160 |
348 |
239 |
395 |
292 |
1,113 |
571 |
885 |
1,773 |
Total ( a to c) |
525 |
1,004 |
1,339 |
1,687 |
1,672 |
3,249 |
4,965 |
2,903 |
4,192 |
5,230 |
Statement 6: Invisibles Payments by Category of Transactions (Contd.) |
(Rs. crore) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
4) Government Not Included |
|
|
|
|
|
|
|
|
|
|
Elsewhere |
|
|
|
|
|
|
|
|
|
|
a. Maintenance of Indian embassies and diplomatic missions abroad |
1,023 |
1,199 |
1,002 |
938 |
855 |
1,516 |
1,971 |
1,284 |
1,099 |
3,093 |
b. Remittances by foreign embassies and missions in India |
144 |
261 |
347 |
167 |
121 |
327 |
372 |
541 |
419 |
684 |
Total (a to b) |
1,167 |
1,460 |
1,349 |
1,105 |
976 |
1,843 |
2,343 |
1,825 |
1,518 |
3,777 |
5) Miscellaneous Account |
|
|
|
|
|
|
|
|
|
|
a) Communication services |
826 |
583 |
1,767 |
4,704 |
3,547 |
3,298 |
1,285 |
3,589 |
3,462 |
5,025 |
b) Construction services |
220 |
757 |
2,446 |
6,391 |
2,995 |
3,217 |
3,209 |
3,337 |
2,844 |
4,168 |
c) Financial services |
5,785 |
8,991 |
6,046 |
6,765 |
3,217 |
3,735 |
4,265 |
13,460 |
12,560 |
13,568 |
d) Software services |
1,600 |
2,705 |
3,202 |
3,565 |
2,175 |
3,579 |
5,954 |
10,212 |
13,494 |
12,702 |
e) News agency services |
693 |
1,167 |
777 |
1,122 |
1,080 |
1,251 |
576 |
1,015 |
2,040 |
1,793 |
f) Royalties, copyright and license fees |
1,351 |
1,073 |
1,723 |
1,703 |
2,039 |
3,185 |
2,640 |
4,632 |
4,167 |
7,937 |
g) Business services (i to xii)$ |
5,003 |
4,674 |
7,154 |
8,768 |
11,711 |
32,807 |
34,428 |
71,500 |
66,469 |
71,436 |
i) Merchanting services |
|
|
|
|
|
1,055 |
547 |
1,324 |
2,885 |
3,439 |
ii) Trade related services |
|
|
|
|
|
4,741 |
5,352 |
8,118 |
9,189 |
7,587 |
iii) Operational Leasing Services |
|
|
|
|
|
1,584 |
2,052 |
4,249 |
4,675 |
4,586 |
iv) Legal services |
|
|
|
|
|
327 |
363 |
724 |
1,938 |
1,551 |
v) Accounting / Auditing services |
|
|
|
|
|
58 |
89 |
263 |
276 |
609 |
vi) Business Management |
|
|
|
|
|
|
|
|
|
|
& Consultancy services |
3,456 |
2,499 |
2,537 |
3,135 |
3,734 |
5,708 |
10,769 |
15,739 |
13,754 |
16,579 |
vii) Advertising/trade fair |
|
|
|
|
|
2,298 |
1,860 |
7,974 |
5,236 |
4,158 |
viii) Research & Development services |
|
|
|
|
|
254 |
515 |
906 |
1,628 |
1,941 |
ix) Architectural Engineering& other technical services |
|
|
|
|
|
4,987 |
6,293 |
13,630 |
12,399 |
14,479 |
x) Agricultural Mining & on-site processing services |
|
|
|
|
|
30 |
67 |
333 |
202 |
752 |
xi) Maintenance of officesabroad services |
1,547 |
2,175 |
4,617 |
5,633 |
7,977 |
11,746 |
6,480 |
18,215 |
14,250 |
15,717 |
xii) Environmental services |
|
|
|
|
|
19 |
41 |
27 |
38 |
40 |
h) Personal, Cultural & Recreational services |
|
|
|
|
|
461 |
371 |
525 |
848 |
1,478 |
i) Refunds/rebates |
387 |
292 |
715 |
736 |
1,677 |
3,437 |
201 |
1,655 |
2,240 |
2,500 |
j) Other services$$ |
13,192 |
15,031 |
8,510 |
14,246 |
18,483 |
20,884 |
26,460 |
18,621 |
9,494 |
8,123 |
Total (a to j) |
29,057 |
35,273 |
32,340 |
48,000 |
46,924 |
75,854 |
79,389 |
1,28,548 |
1,17,618 |
1,28,731 |
B) Transfers |
150 |
981 |
1,729 |
3,886 |
2,633 |
4,066 |
4,134 |
6,288 |
9,293 |
12,568 |
1) Official Transfers |
|
|
|
|
|
|
|
|
|
|
i) Grants/donations from official sector |
2 |
0 |
0 |
0 |
0 |
1,598 |
2,103 |
1,723 |
2,073 |
1,900 |
Total |
2 |
0 |
0 |
0 |
0 |
1,598 |
2,103 |
1,723 |
2,073 |
1,900 |
2) Private Transfers |
|
|
|
|
|
|
|
|
|
|
ai) Remittance by Non-residents towards family maintenance nd savings |
125 |
581 |
1,392 |
3,668 |
2,387 |
1,887 |
1,569 |
3,719 |
6,348 |
8,822 |
ii) Personal gifts/donations to charitable/religious institutions |
23 |
400 |
337 |
218 |
246 |
581 |
462 |
846 |
872 |
1,846 |
Statement 6: Invisibles Payments by Category of Transactions (Concld.) |
(Rs. crore) |
Items |
1999-00 |
2000-01 |
2001-02 |
2002-03 |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08
R |
2008-09
PR |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
Of which: |
|
|
|
|
|
|
|
|
|
|
iii)Remittance towards personal gifts and donations |
|
|
|
|
|
488 |
426 |
714 |
593 |
1,549 |
iv) Remittance towards donations to religious & charitable institutions abroad |
|
|
|
|
|
75 |
32 |
79 |
97 |
106 |
v) Remittance towards grants and donations to other governments & charitable institutions established by the governments |
|
|
|
|
|
18 |
4 |
53 |
44 |
43 |
Total (i to v) |
148 |
981 |
1,729 |
3,886 |
2,633 |
2,468 |
2,031 |
4,565 |
7,220 |
10,668 |
C) Income |
23,804 |
35,008 |
36,148 |
33,739 |
38,617 |
43,013 |
54,542 |
75,250 |
77,811 |
86,615 |
a) Compensation of Employees |
|
|
|
|
|
|
|
|
|
|
i) Payment of wages/salary to Non-residents working in |
|
|
|
|
|
|
|
|
|
|
India |
57 |
2,123 |
2,318 |
2,892 |
4,031 |
6,066 |
3,430 |
4,295 |
4,402 |
6,018 |
Total |
57 |
2,123 |
2,318 |
2,892 |
4,031 |
6,066 |
3,430 |
4,295 |
4,402 |
6,018 |
b) Investment Income |
|
|
|
|
|
|
|
|
|
|
i) Payment of interest on NRI deposits |
7,549 |
8,276 |
8,621 |
6,845 |
7,536 |
6,071 |
6,634 |
8,909 |
7,315 |
7,142 |
ii) Payment of interest on loans from Non-residents |
13,167 |
13,401 |
13,599 |
12,565 |
15,920 |
11,001 |
19,215 |
17,136 |
20,356 |
24,248 |
iii) Payment of dividend/profit to Non-resident share holders |
2,333 |
4,676 |
3,397 |
2,237 |
4,041 |
8,969 |
11,123 |
15,774 |
12,961 |
14,244 |
Of which: |
|
|
|
|
|
|
|
|
|
|
Payment of dividend to |
|
|
|
|
|
|
|
|
|
|
Non-resident share holders |
|
|
|
|
|
7,120 |
10,674 |
14,634 |
12,048 |
12,997 |
Payment of profit to |
|
|
|
|
|
|
|
|
|
|
Non-resident share holders |
|
|
|
|
|
1,849 |
449 |
1,140 |
913 |
1,247 |
iv) Reinvested Earning |
0 |
6,177 |
7,841 |
8,866 |
6,710 |
8,555 |
12,219 |
26,371 |
30,920 |
29,705 |
v) Payment of interest on debentures, FRNs, CPs fixed deposits, Government securities etc. |
512 |
271 |
103 |
207 |
192 |
766 |
532 |
158 |
227 |
559 |
vi) Charges on SDRs |
132 |
73 |
248 |
96 |
73 |
86 |
75 |
135 |
85 |
130 |
vii) Interest paid on overdraft on VOSTRO a/c Holders/ OD on NOSTRO a/c |
2 |
2 |
2 |
22 |
92 |
1,154 |
945 |
1,829 |
954 |
2,466 |
ix) Payment of taxes by the Indians/refund of taxes by government to Non-residents |
52 |
9 |
19 |
9 |
22 |
345 |
369 |
643 |
592 |
2,105 |
Total (i to ix) |
23,747 |
32,885 |
33,830 |
30,847 |
34,586 |
36,947 |
51,112 |
70,955 |
73,410 |
80,597 |
R : Revised. PR : Partially Revised.
@ : For the period prior to 2004-05, the break up of ‘freight on imports’ between the sea transport and the air transport is not separately
available. Therefore, these have been included under the head ‘freight on imports’.
+ : The category ‘freight on exports’ was introduced in 2004-05 with a view to improve the data coverage.
# : For the period prior to 2004-05, the break up between the sea transport and the air transport is not separately available. Therefore,
these have been included under the head ‘remittance on passage booking abroad’.
@@: Included under the heads ‘sea transport’ and ‘air transport’.
## : Included under the heads ‘sea transport’ and ‘air transport’.
$ : These new categories of services are available since 2004-05 as the reporting system was put in place to record such transactions.
$$ : Till 2003-04, others included advertising, rentals, office maintenance, prizes, exhibitions & other services not included elsewhere. |
Annex I : Compilation and Dissemination of India’s Invisibles
India’s invisibles details form part of India’s
Balance of Payments (BoP) and are released in two
stages viz., (i) standard presentation with broad
heads and (ii) detailed presentation with breakup
of broad heads. In the first stage, major
components of invisibles are released as part of
the BoP on a quarterly basis to meet the IMF’s
Special Data Dissemination Standards (SDDS).
These quarterly details are released through the
Reserve Bank of India (RBI) website and also
published in the RBI Bulletin. In the first stage,
the coverage is limited under broad heads of
services (travel, transportation, insurance,
government not included elsewhere and
miscellaneous services including those of
software services, business services, financial
services and communication services), transfers
(private and official transfers) and income
(investment income and compensation of
employees). In the second stage, when the data
firm up and more details are available, the
disaggregated details on invisibles are compiled
and provided on an annual basis. These
disaggregated data are published as an article
titled “Invisibles in India’s Balance of Payments”
in the RBI Bulletin. The details regarding new
reporting arrangements which were put in place
in 2004-05, wherein a number of new purpose
codes were introduced with a view to collect data separately for a number of emerging business
services including those of merchanting services,
trade related services, operational leasing
services, legal services, accounting services,
business and management services, advertising
services, research and development services,
architectural and engineering services,
agricultural services, office maintenance services,
environmental services and personal and cultural
services, were published in the previous issue of
the article published in the RBI Bulletin,
November 2006.
The details on invisibles are extracted from
India’s Balance of Payments records and the
balance of payments details are compiled in
accordance with the guidelines in the IMF’s Balance
of Payments Manual, 5th Edition (BPM5), 1993,
with minor modifications to adapt to the specifics
of the Indian situation. The Manual defines BoP
as a statistical statement that systematically
summarises, for a specific time period, the
economic transactions of an economy with the rest
of the world. Transactions between residents and
non-residents consist of those involving goods,
services, and income; involving financial claims
on and liabilities to the rest of the world; and those
classified as transfers, involving offsetting entries
to balance one-sided transactions.
Annex II: Details on Definitional Aspect of Components of Invisibles |
Item |
Description |
1.
Services |
|
(i)
Travel |
‘Travel’represents all expenditure by foreign tourists in India on the receipts side and all expenditure by Indian tourists abroad on payments side. Travel receipts largely depend on the arrival of foreign tourists in India during a given time period. |
(ii) Transportation |
‘Transportation’ records receipts and payments on account of the carriage of goods and people as well as other distributive services (such as port charges, bunker fuel, stevedoring, cabotage, warehousing) performed on merchandise trade. |
(iii) Insurance |
‘Insurance’ consists of insurance on exports/imports, premium on life and non-life policies and reinsurance premium from foreign insurance companies. |
(iv) Government Not Included Elsewhere (GNIE) |
‘Government not included elsewhere (GNIE)’ represent remittances towards maintenance of foreign embassies, diplomatic missions and international/ regional institutions, while payments record the remittances on account of maintenance of embassies and diplomatic missions abroad. |
(v)
Miscellaneous Services |
‘Miscellaneous services’ encompass communication services, construction services, financial services, software services, news agency services, royalties, copyright and license fees, management services and business services. Business services comprise merchanting services, trade related services, operational leasing services, legal services, accounting services, business and management consultancy services, advertising services, research and development services, architectural and engineering services, agricultural services, mining and on-site processing services, office maintenance services, environmental services, distribution services, audio-visual and related services and personal and cultural services. |
2.
Investment Income |
‘Investment income’ represents the servicing of capital transactions (both debt and non-debt). These transactions are in the form of interest, dividend, profit and others for servicing of capital transactions. Interest payments represent servicing of debt liabilities, while the dividend and profit payments reflect the servicing of non-debt (foreign direct investment and portfolio investment) liabilities. Investment income payments move in tandem with India’s external liabilities, while investment income receipts get linked to India’s external assets including foreign exchange reserves. In accordance with the BPM5, ‘compensation of employees’ has been shown under the heading, “income” with effect from 1997-98. |
3.
Transfers |
‘Transfers’ represent one-sided transactions, i.e., transactions that do not have any quid pro quo, such as grants, gifts, and migrants’ transfers by way of remittances for family maintenance, repatriation of savings and transfer of financial and real resources linked to change in resident status of migrants. Official transfer receipts record grants, donations and other assistance received by the Government from bilateral and multilateral institutions. Similar transfers by the Indian Government to other countries are recorded under official transfer payments. |
* Prepared in the Division of International Finance,
Department of Economic Analysis and Policy, Reserve
Bank of India, Mumbai.
1
Previous issue of the article was published in RBI
Bulletin, March 2009 covering the data for the period 2000-
01 to 2007-08. Such data for the period 1999-2000 to 2006-
07 were earlier published in the February 2008 issue of
RBI Bulletin. Data for the period 1999-2000 to 2005-06 were
published in the November 2006 issue of RBI Bulletin, for
the period 1997-98 to 1999-2000 in the January 2001 issue
of RBI Bulletin and for the period 1989-90 to 1996-97 in
the April 1999 issue of the RBI Bulletin. The data for the
period 1956-57 to 1989-90 were published in July 1993 in
the “Monograph on India’s Balance of Payments”. |