India posts current account deficit of $9.6 billion in July-September 2021

Representational Image. Source: Reuters

India's current account balance returned to deficit territory in July-September 2021 due to a higher merchandise import bill, data released by the Reserve Bank of India (RBI) on December 31 showed.

The current account deficit in July-September 2021 was $9.6 billion as against a surplus of $6.6 billion in April-June 2021. In July-September 2020, the current account surplus was even larger at $15.3 billion.

In Q2FY22, India's merchandise trade deficit widened to $44.4 billion from $30.7 billion the previous quarter because of a 16.5 percent increase in imports to $149.3 billion, RBI data showed. This pushed the current account balance back into deficit.

"Net services receipts decreased marginally over the previous quarter but increased on a year-on-year basis, on the back of robust performance of the exports of computer and business services," the RBI added.

The services trade surplus for July-September 2021 was $25.6 billion, marginally lower than $25.8 billion in April-June 2021.

For the first half of FY22, India had a current account deficit of $3.0 billion. In April-September 2020, the current account was in a massive surplus of $34.4 billion because of a sharp fall in merchandise imports and low oil prices.