India's current account deficit (CAD) fell to $10.5 billion in the third quarter of 2023-24, according to figures issued by the Reserve Bank of India (RBI) on March 26. According to the figures, the CAD in October-December accounted for 1.2 percent of India's GDP. The CAD during July to September 2023 was $11.4 billion, or 1.3 percent of GDP. In October-December 2022, the deficit was $16.8 billion, or 2.0% of GDP.
According to the RBI, the current account deficit as a percentage of GDP for Q2 2023-24 was revised up to 1.3 percent from 1.0 percent before due to an upward adjustment in customs data on item imports.
Though India's merchandise trade deficit was $71.6 billion in the third quarter of FY24, slightly higher than $71.3 billion in the same time a year earlier, services exports increased by 5.2 percent on-year due to surging outbound shipments of software, business, and travel.
"Net service receipts increased both sequentially and from a year ago, helping to cushion the current account deficit," the central bank said in a statement.
India's current account deficit fell to 1.2 percent of GDP from 2.6 percent a year before, owing to a reduced merchandise trade imbalance. Furthermore, India's current account deficit for 2022-23 totaled $67.0 billion, or 2.0 percent of its GDP.
In addition, the country's merchandise trade deficit increased to $18.71 billion in February from $17.49 billion in January, the commerce ministry reported on March 15. The trade deficit was $16.57 billion in February 2023.
While the trade deficit grew in February, merchandise exports increased by 11.9% from the previous year to $41.40 billion, while imports increased by 12.2% to $60.11 billion.
India's goods trade imbalance fell to $225.20 billion between April 2023 and February 2024, from $245.94 billion in the first 11 months of 2022-23. This is an 8.43 percent year-on-year reduction over this time period.
India's February trade imbalance increases to $18.71 billion, while exports hit an 11-month high. Aside from trade, workers' net remittances increased by 2.1 percent to $31.4 billion between October and December, compared to the same period a year before.
