India posted a current account surplus of $13.5 billion or 1.3 per cent of GDP in March quarter 2024-25 as compared with $4.6 billion in the year-ago period mainly on account of surge in services exports and higher remittances, according to RBI data released on Friday.
Illustration: Dado Ruvic/Reuters
However, on annual basis, the current account was in deficit at $23.3 billion (0.6 per cent of GDP) during 2024-25, said the ‘India’s Balance of Payments during the Fourth Quarter (January-March) of 2024-25’ released by Reserve Bank of India.
“India’s current account balance recorded a surplus of $13.5 billion (1.3 per cent of GDP) in Q4:2024-25 as compared with $4.6 billion (0.5 per cent of GDP) in Q4:2023-24 and against a deficit of $11.3 billion (1.1 per cent of GDP) in Q3:2024-25,” RBI said.
Balance of Payments is an indicator of the country’s external payment scenario.
Merchandise trade deficit at $59.5 billion in Q4:2024-25 was higher than $52 billion in Q4:2023-24.
However, it moderated from $79.3 billion in Q3:2024-25.
“Net services receipts increased to $53.3 billion in Q4:2024-25 from $42.7 billion a year ago.
“Services exports have risen on a y-o-y basis in major categories such as business services and computer services,” RBI said.
Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to $33.9 billion in Q4:2024-25 from $31.3 billion in Q4:2023-24.
It further said the net outgo on the primary income account, primarily reflecting payments of investment income, moderated to $11.9 billion in Q4:2024-25 from $14.8 billion in Q4:2023-24.
In the financial account, foreign direct investment (FDI) recorded a net inflow of $400 million in Q4:2024-25 as compared to an inflow of $2.3 billion in the corresponding period of 2023-24.
Foreign portfolio investment (FPI) recorded a net outflow of $5.9 billion in Q4:2024-25 as against a net inflow of $11.4 billion in Q4:2023-24.
There was an accretion of $8.8 billion to the foreign exchange reserves (on a BoP basis) in Q4:2024-25 as compared to an accretion of $30.8 billion in Q4:2023-24.
On Balance of Payments (BoP) during 2024-25, RBI said India’s current account deficit at $23.3 billion (0.6 per cent of GDP) during 2024-25 was lower than $26 billion (0.7 per cent of GDP) during 2023-24, primarily due to higher net invisibles receipts.
Net inflow under FDI at $1 billion during 2024-25 was lower than $10.2 billion during 2023-24.
During 2024-25, FPI recorded a net inflow of $3.6 billion, lower than $44.1 billion a year ago.
Commenting on the data, Aditi Nayar, Chief Economist, ICRA said while the current account balance expectedly reported a seasonal surplus in Q4 FY2025, the size of the same overshot expectations, amid a surprise dip in primary income outflows in the quarter.
Amid expectations of a widening in the merchandise trade deficit as well as a moderation in the services trade surplus in Q1 FY2026 vis-a-vis Q4 FY2025, “we expect the current account to revert to a deficit in the ongoing quarter”, she said.
