Preliminary data on India’s balance of payments (BoP) for the first
quarter (Q1), i.e., April-June 2013, of the financial year 2013-14, are now available and presented in Statements I and II. While Statement I presents BoP data in BPM6 format, Statement II provides the same as per the old format.
Developments in India’s BoP during April-June 2013
- India’s current account deficit (CAD) in Q1 of 2013-14 was US$ 21.8
billion (4.9 per cent of GDP). It was US$ 16.9 billion (4.0 per cent of
GDP) in Q1 of 2012-13. The trade deficit in Q1 of 2013-14 increased
owing to a rise in imports and some decline in merchandise exports.
- Excluding the increase in gold imports of US$ 7.3 billion in Q1 of
2013-14 over the corresponding quarter of the preceding year, CAD would
work out to US$ 14.5 billion, which translates into 3.2 per cent of GDP.
- On BoP basis, merchandise exports declined by 1.5 per cent to US$
73.9 billion in Q1 of 2013-14 as compared with a decline of 4.8 per cent
at US$ 75.0 billion in Q1 of 2012-13.
- In contrast, merchandise imports recorded an increase of 4.7 per
cent at US$ 124.4 billion in Q1 of 2013-14 as against a decline of 3.9
per cent at US$ 118.9 billion in Q1 of 2012-13, primarily led by a steep
rise in gold imports in the first two months of the quarter.
- Merchandise trade deficit (BoP basis) widened further to US$ 50.5 billion in Q1 of 2013-14 from US$ 43.8 billion a year ago.
- While growth in services exports moderated to 2.1 per cent (US$
36.5 billion) in Q1 of 2013-14 as compared with 6.1 per cent (US$ 35.8
billion) in Q1 of the preceding year, imports of services registered a
decline of 5.5 per cent (US$ 19.7 billion) as against a growth of 19.3
per cent at US$ 20.8 billion in the corresponding quarter of preceding
year. As a result, net receipts on account of services during the
quarter were higher at US$ 16.9 billion as compared to US$ 15.0 billion
in the corresponding period of 2012-13.
- Net outflow on account of primary income amounting to US$ 4.8
billion in Q1 of 2013-14 was lower than that in the preceding quarter
(US$ 5.2 billion) as well as the corresponding quarter (US$ 4.9 billion)
of 2012-13.
- The trade deficit, coupled with a slow recovery in net invisibles
(income & services), led to widening of CAD to US$ 21.8 billion in
Q1 of 2013-14 from US$ 16.9 billion in Q1 of 2012-13.
- Notwithstanding a net outflow in portfolio investment led by FII
debt outflows, net inflows under capital and financial account
(excluding changes in foreign exchange reserves) rose by 25.2 per cent
to US$ 20.5 billion in Q1 of 2013-14 from US$ 16.4 billion in Q1 of
2012-13. The rise was mainly on account of increase in FDI and loans
availed by banks.
- While net foreign direct investment surged to US$ 6.5 billion in Q1
of 2013-14 from US$ 3.8 billion in Q1 of 2012-13, net portfolio
investment registered a marginal outflow of US$ 0.2 billion as compared
with an outflow of US$ 2.0 billion in Q1 of 2012-13, primarily led by
the debt component of FII investment. Outflow of portfolio investment
occurred essentially from the third week of May 2013 after the US Fed
indicated the possible tapering of quantitative easing.
- Net overseas borrowing by banks increased by 57.5 per cent to US$
4.7 billion in Q1 of 2013-14 from US$ 3.0 billion in Q1 of 2012-13. Net
external commercial borrowings at US$ 0.4 billion in Q1 of 2013-14
remained at the same level as that in Q1 of 2012-13. Higher repayments
of trade credit moderated net inflows under ‘trade credit &
advances’ to US$ 2.5 billion in Q1 of 2013-14 from US$ 5.4 billion in Q1
of 2012-13.
- On BoP basis, there was a slight drawdown in foreign exchange
reserves of US$ 0.3 billion in Q1 of 2013-14 as against an accretion of
US$ 0.5 billion in Q1 of 2012-13
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