A higher than expected current account surplus in the last quarter of the year, pushed India’s current account deficit for FY25 lower to 0.6 percent of the GDP from 0.7 percent earlier, according to data released by the Reserve Bank of India.
India’s current account surplus had inched up to 1.3 percent of the GDP, compared with 1.1 percent deficit in the previous quarter and 0.5 percent surplus during Q4FY24.
"While the current account balance expectedly reported a seasonal surplus in Q4 FY2025, the size of the same overshot our expectations, amid a surprise dip in primary income outflows in the quarter. This led to the unexpected narrowing in the CAD to 0.6% of GDP in FY2025 from 0.7% in FY2024,” said Aditi Nayar, chief economist, ICRA.
India’s merchandise trade deficit was higher at $59.5 billion compared with $52 billion during similar quarter in FY25, but moderated from $79.3 billion in the third quarter.
A rise in business services and computer services led by GCC business, helped push the trade deficit down. Net services receipts increased to $53.3 billion in Q4FY5 from $ 42.7 billion a year ago. Services exports have risen on a year-on-year basis in major categories such as business services and computer services, data showed.
Net outgo on the primary income account, primarily reflecting payments of investment income, moderated to $ 11.9 billion in Q4FY25 from $ 14.8 billion in Q4FY4. Net inflow under FDI at $1.0 billion during 2024-25 was lower than US$ 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.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
