Balance of Payments

Lower trade deficit further narrows India's current account deficit to 0.9% of GDP in July-Sep 2019

Note: Published quarterly by Reserve Bank of India. Updated till July - September 2019 (Published on December 31, 2019).

Recent Data Trend

India's Current account deficit (CAD) narrowed to 0.9% of GDP between July-September 2019 as compared to 2.9% of GDP during the same quarter in 2018. The narrowing of CAD is led by shrinking trade deficit which reduced to USD 38.1 billion from USD 50 billion a year ago. 

The narrowing of trade deficit is led by subdued economic activities India, as a result of which imports reduced at a faster pace than exports. 

Foreign portfolio investments recorded a net inflow of USD 2.5 billion up from USD 0.2 billion in Q2 2018-19.  And, the net foreign direct investments was USD 7.4 Billion equivalent to Q2 2018-19. 

Slowing economic activities which in turn has lowered imports into the economy is further expected to narrow down the current account deficit for the Q3 2019 (October 2019-December 2019). 

Brief Overview

The Balance of Payments (BoP) records all economic transactions between residents of a country and the rest of the world. The BoP account mainly consists of the current account and the capital account. 

The current account includes the transaction of goods, services, primary income, and secondary income between the residents and the rest of the world. The current account balance is largely driven by the movement of goods and services.

The capital account comprises credit and debit transactions under non-produced non-financial assets and capital transfers between residents and non-residents. Thus, acquisitions and disposals of non-produced non-financial assets, such as land sold to embassies and sales of leases and licenses, as well as transfers which are capital in nature, are recorded under this account.

RBI publishes the balance of payments data every quarter, in two formats, an old format and a BPM6 format as recommended by the IMF. We have gathered the data starting from April-June 1990 from "the handbook of statistics on Indian economy". The time series BPM6 data in the RBI database starts only in April-June 2011, and it is provisional or partially revised, therefore, we have used data as of old format. The overall balance of payment corresponds to the change in reserves. The change in reserves are denoted by opposite signs in the RBI data, i.e. increase in reserves is denoted by (-) sign and decrease in reserves by (+) sign. In our analysis, to make sure that the data is easy to understand we present the change in reserves as (+) if it has increased and (-) if it has decreased.

For further details visit the official website.

Next Release Date: To be decided.

Balance of Payments- Annual

Note: The  years in the graph represents fiscal year, for instance, the year 2009 represents the period Apr'09-Mar'10