Lower trade deficit swings India’s Q1FY22 current account into $6.5 bn surplus

Mumbai, Sep 30 (SocialNews.XYZ) India posted a healthy current account surplus in Q1FY22 on the back of a lower trade deficit, official data showed on Thursday.

The current account swung into positive territory with a surplus of $6.5 billion in Q1FY22 from a deficit of $8.1 billion in the preceding quarter.

On a YoY basis, the country's Balance of Payment was in surplus of $19.1 billion in Q1FY21.

"The surplus in the current account in Q1:2021-22 was primarily on account of contraction in the trade deficit to $30.7 billion from $41.7 billion in the preceding quarter, and an increase in net services receipts," the RBI said in a statement.

"Net services receipts increased, both sequentially and on a year-on-year (y-o-y) basis, on the back of robust performance of net exports of computer and business services."

Besides, private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $20.9 billion, an increase of 14.8 per cent from their level a year ago.

"Net outgo from the primary income account, mainly reflecting net overseas investment income payments, decreased sequentially as well as on a y-o-y basis."

In the financial account, net foreign direct investment recorded inflow of $11.9 billion as against outflow of $0.5 billion in Q1FY21.

"Net foreign portfolio investment was $0.4 billion as compared with $0.6 billion in Q1:2020-21."

"Net external commercial borrowings to India recorded inflow of $0.5 billion in Q1:2021-22 as against an outflow of $0.6 billion a year ago."

However, net inflow on account of non-resident deposits decreased to $2.5 billion from $3 billion in Q1FY21.

There was an accretion of $31.9 billion to the foreign exchange reserves (on a BoP basis) as compared with that of $19.8 billion in Q1FY21.

Source: IANS