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The surplus in the current account was on account of a sharp contraction in the trade deficit to $10.0 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis, RBI said in its report on India's Balance of Payments
India’s current account balance (CAB) recorded a surplus of $19.8 billion - 3.9 percent of GDP - in the June quarter of FY21, up from the surplus of $0.6 billion in the preceding quarter (Q4FY20), on the back of lower trade deficit, the Reserve Bank of India (RBI) said on September 30.
A deficit of $15 billion was recorded in the corresponding period last year, showed the RBI's data on India's Balance of Payments (BoP).
"The surplus in the current account in Q1 of FY 2020-21 was on account of a sharp contraction in the trade deficit to $10.0 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis," the central bank said in a statement.
The banking regulator said the net services receipts remained stable, primarily on the back of net earnings from computer services.
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However, private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 18.2 billion, a decline of 8.7 per cent year-on-year.
Meanwhile, the net outgo from primary income account rose to $7.7 billion from $6.3 billion a year ago, said the RBI.
The RBI said the net foreign direct investment (FDI) recorded an outflow of $0.4 billion as against inflows of $14 billion in in the year-ago period.
The net foreign portfolio investment (FPI) stood at $0.6 billion as compared with $4.8 billion in the same period last year.
The RBI said the net purchases in the equity market were offset by net sales in the debt segment.
The external commercial borrowings to India recorded a net outflow of $1.1 billion in the quarter under review as against an inflow of $6 billion a year ago due to the repayments exceeding fresh disbursals, the central bank said in the statement.
However, the net inflow on account of non-resident deposits increased to $3 billion from $2.8 billion in the corresponding period last year.
On the issue of foreign exchange reserves, the RBI said there was an accretion of $19.8 billion on a BoP basis in comparison to $14.0 billion in Q1 of FY20.