India's current account deficit declined sharply to 1 per cent of the GDP or $8.3 billion in the second quarter of this financial year mainly because of lower merchandise trade deficit and growth in services exports, RBI data released on Tuesday showed. According to the RBI data, the current account deficit was 3.8 per cent of GDP or $30.9 billion in July-September quarter in 2022-23.
The current account deficit was $9.2 billion or 1.1 per cent of GDP in the first quarter (April-June) of the current financial year 2023-24.
"Underlying the lower current account deficit on a year-on-year (YoY) basis in Q2:2023-24 was the narrowing of merchandise trade deficit to $61.0 billion from $78.3 billion in Q2:2022-23," said the data on Developments in India's Balance of Payments during the second quarter (July-September) of 2023-24.
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While the merchandise trade deficit was significantly lower compared to the year-ago quarter, it was $4.4 billion higher from April-June. However, the rise in the goods trade deficit was cancelled out by a $4.8 billion quarter-on-quarter increase in the services trade surplus to $40.0 billion.
Services exports grew by 4.2 per cent on a YoY basis on the back of rising exports of software, business and travel services, the RBI said. Net services receipts increased both sequentially and on a YoY basis, it added.
Meanwhile, India's exports dropped by 2.83 per cent to $33.90 billion in November this year compared to $34.89 billion a year ago, according to a government data released on December 15. Imports also slipped to $54.48 billion in the month under consideration, as against $56.95 billion recorded in November 2022.
India's trade deficit in November now stood at $20.58 billion. During the April-November period of this fiscal year, exports contracted by 6.51 per cent to $278.8 billion. Imports during the eight-month period fell by 8.67 per cent to $445.15 billion.