Monthly Bulletin - February 2011

Highlights:

1. Developments in India's BoP during Second Quarter of 2010-11: Trade, Invisibles and Capital Account.

The article provides details on developments in India's balance of payments during July-September 2010 along with the partially revised data for April-June 2010 and revised data for 2008-09 and 2009-10. As per the recommendation of the Working Group on Balance of Payments Manual for India (Chairman: Deepak Mohanty), the disaggregated data on services for the first two quarters of 2010-11 have also been published as part of this article.

Main Findings

• The trade deficit widened to US$ 35.4 billion during July-September 2010, despite higher growth in exports relative to imports.
  
• The higher growth in invisibles payments led by travel, transportation, business and financial services coupled with lower growth in invisibles receipts due to moderation in receipts under income and private transfers resulted in a lower net invisibles surplus of US$ 19.6 billion during July-September 2010 as compared with the corresponding period of last year.
  
• The higher trade deficit combined with the lower invisibles surplus resulted in the widening of current account deficit to US$ 15.8 billion during the second quarter of 2010-11.
  
• The capital account surplus increased over the corresponding quarter of last year, mainly due to portfolio investments, short-term credit and external commercial borrowings.
  
• With capital account surplus being higher than the current account deficit, the overall balance was in surplus at US$ 3.3 billion resulting in a net accretion to foreign exchange reserves of equivalent amount during July-September 2010.
  

Press Release : 2010-2011/1153