India's current account deficit (CAD) fell to $13.4 billion in January-March 2022 from $22.2 billion in October-December 2021, according to data released by the Reserve Bank of India (RBI) on June 22.
The deficit was $8.1 billion in January-March 2021.
In percentage terms, the CAD in January-March 2022 was 1.5 percent of GDP, down from 2.6 percent of GDP the previous quarter.
"The sequential decline in CAD in Q4:2021-22 (January-March) was mainly on account of a moderation in trade deficit and lower net outgo of primary income," the central bank said.
India's merchandise trade deficit fell to $54.5 billion in the first quarter of 2022 from $59.8 billion the previous quarter, helping bring down the CAD.
On the services front, the trade surplus edged up marginally to $28.3 billion from $27.8 billion in October-December 2021.
Also helping the current account deficit to moderate was a lower net outgo of primary income, which amounted to $8.4 billion last quarter.
In October-December 2021, the net outgo of primary income was $11.5 billion.
Primary income includes compensation of employees and investment income.
While there was a decline in quarterly current account deficit, India's current account deficit for FY22 was at a three-year high of $38.7 billion, thanks to the merchandise trade deficit nearly doubling to $189.5 billion from $102.2 billion in FY21.
FY22 saw India's import bill rising on two accounts - higher imports following a recovery in economic activity as well as higher global commodity prices, including those of crude oil.
In percentage terms, the CAD posted a deficit of 1.2 percent of GDP in FY22, up from 0.9 percent of GDP in FY21.
The last time India's annual CAD was higher was in FY19, when it came in at $57.3 billion.