Preliminary data on India’s balance of payments (BoP) for the fourth quarter (Q4), i.e., January-March 2023-24, are presented in Statements I and II.
Key Features of India’s BoP in Q4:2023-24
India’s current account balance recorded a surplus of US$ 5.7 billion (0.6 per cent of GDP) in Q4:2023-24 as against a deficit of US$ 8.7 billion (1.0 per cent of GDP) in Q3:2023-241 and US$ 1.3 billion (0.2 per cent of GDP) a year ago [i.e., Q4:2022-23]2.
The merchandise trade deficit at US$ 50.9 billion in Q4:2023-24 was lower than US$ 52.6 billion a year ago.
Services exports grew by 4.1 per cent on a y-o-y basis in Q4:2023-24 on the back of rising exports of software, travel and business services. Net services receipt at US$ 42.7 billion was higher than its level a year ago (US$ 39.1 billion), which contributed to the surplus in the current account balance during Q4:2023-24.
Net outgo on the primary income account, primarily reflecting payments of investment income, increased to US$ 14.8 billion from US$ 12.6 billion a year ago.
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 32.0 billion, an increase of 11.9 per cent over their level a year ago.
In the financial account, net foreign direct investment flows were US$ 2.0 billion in Q4:2023-24 as compared with US$ 6.4 billion a year ago.
Foreign portfolio investment recorded a net inflow of US$ 11.4 billion in Q4:2023-24 as against a net outflow of US$ 1.7 billion during Q4:2022-23.
Net inflows under external commercial borrowings to India amounted to US$ 2.6 billion in Q4:2023-24 as compared with US$ 1.7 billion a year ago.
Non-resident deposits recorded a higher net inflow of US$ 5.4 billion than US$ 3.6 billion in Q4:2022-23.
There was an accretion of foreign exchange reserves (on a BoP basis i.e., excluding valuation effects) to the tune of US$ 30.8 billion in Q4:2023-24 as compared with an accretion of US$ 5.6 billion a year ago (Table 1).
BoP during 2023-24
India’s current account deficit moderated to US$ 23.2 billion (0.7 per cent of GDP) during 2023-24 from US$ 67.0 billion (2.0 per cent of GDP) during the previous year on the back of a lower merchandise trade deficit.
Net invisibles receipt was higher during 2023-24 than a year ago, primarily on account of services and transfers.
During 2023-24, portfolio investment recorded a net inflow of US$ 44.1 billion as against an outflow of US$ 5.2 billion a year ago.
Net FDI inflow was US$ 9.8 billion during 2023-24 as compared with US$ 28.0 billion in 2022-23.
In 2023-24, there was an accretion of US$ 63.7 billion to the foreign exchange reserves (on a BoP basis).
Table 1: Major Items of India’s Balance of Payments (US$ billion) January-March 2023 January-March 2024 2022-23 2023-24 Credit Debit Net Credit Debit Net Credit Debit Net Credit Debit Net A. Current Account 238.0 239.3 -1.3 253.6 247.9 5.7 921.9 988.8 -67.0 942.9 966.1 -23.2 1. Goods 115.8 168.4 -52.6 121.7 172.5 -50.9 456.1 721.4 -265.3 441.5 683.5 -242.1 Of which: POL 23.9 50.8 -26.9 22.2 49.6 -27.4 97.5 209.4 -111.9 84.2 179.6 -95.5 2. Services 85.8 46.8 39.1 89.4 46.7 42.7 325.3 182.0 143.3 341.1 178.3 162.8 3. Primary Income 7.7 20.3 -12.6 10.5 25.3 -14.8 27.8 73.8 -45.9 41.5 91.2 -49.8 4. Secondary Income 28.6 3.9 24.8 32.1 3.4 28.7 112.6 11.7 100.9 118.9 13.0 105.9 B. Capital Account and Financial Account 153.4 152.5 0.9 248.1 254.4 -6.2 702.9 634.9 68.0 850.3 827.8 22.5 Of which: Change in Reserve (Increase (-)/Decrease (+)) 0 5.6 -5.6 0.0 30.8 -30.8 30.4 21.2 9.1 0.0 63.7 -63.7 C. Errors & Omissions (-) (A+B) 0.4 0.0 0.4 0.5 0.0 0.5 0.0 1.0 -1.0 0.7 0.0 0.7 P: Preliminary. Note: Total of subcomponents may not tally with aggregate due to rounding off.
(Puneet Pancholy)
Chief General Manager
Press Release: 2024-2025/550
1 The current account deficit for Q3:2023-24 was revised to US$ 8.7 billion from US$ 10.5 billion earlier due to downward adjustment of customs data on merchandise imports.
2 https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=55933. For longer time series data, please see: CIMS DBIE (rbi.org.in) › Statistics › External Sector › International Trade › Quarterly/Yearly.