Mumbai : The current account deficit (CAD) narrowed sharply to 1.6 % of GDP at USD 8.2 billion in the second quarter ended September, mainly due to lower trade deficit. The July-September CAD is lower than USD 10.9 billion, or 2.2 % of GDP, in the same quarter of last fiscal. However, on a sequential basis, the CAD is higher than 1.2% for the previous quarter of current fiscal.
“The contraction in CAD was primarily on account of lower trade deficit (USD 37.4 billion) as compared with USD 39.7 billion in Q2 of last year though it was higher than the level in the preceding quarter (USD 34.2 billion),” RBI said in the second quarterly balance of payments data.
Within merchandise trade, exports in Jul-Sep declined marginally to $67.6 bln from $68.0 bln in Apr-Jun. However, compared to a year ago, exports in the reporting quarter were lower by a massive 19%.
India’s worsening trade data has been a major cause of concern, with exports in November falling for the 12th month in row in year-on-year terms to $20.0 bln.
On services trade front, exports in Jul-Sep rose marginally to $38.8 bln from $38.4 bln a year ago and $38.3 bln in Apr-Jun. Services imports were largely unchanged at $20.8 bln as against $20.9 bln in Apr-Jun and $19.4 bln last year.
“Although net services receipts moderated marginally on a annual basis largely due to fall in export receipts in transport, insurance and pension services, there has been some improvement over the preceding quarter,” it said.
During the first 6 months of the current fiscal, the CAD narrowed to 1.4 % of GDP from 1.8 % in the same period a year ago on contraction in the trade deficit and a marginal improvement in net invisibles.
India’s trade deficit narrowed to USD 71.6 billion in the first half from USD 74.7 billion in the same period previous fiscal. -Agencies
