India’s Current Account Surplus in Q4 FY 2023-24: RBI Reports

New Delhi [India], June 24: India’s current account balance registered a surplus of USD 5.7 billion, equivalent to 0.6% of GDP, in the fourth quarter of the financial year 2023-24, according to the Reserve Bank of India (RBI). This marks a significant turnaround from the previous quarter’s deficit of USD 8.7 billion (1.0% of GDP).

Compared to the same period a year earlier, the surplus improved from USD 1.3 billion (0.2% of GDP). A key factor was the reduction in the merchandise trade deficit, which stood at USD 50.9 billion, down from USD 52.6 billion in the previous year.

The RBI noted a notable increase in services exports, which grew by 4.1% year-on-year, driven by rising exports in software, travel, and business services. Net services receipts rose to USD 42.7 billion from USD 39.1 billion, significantly contributing to the surplus.

Private transfer receipts, mainly remittances by Indians working overseas, increased by 11.9% to USD 32.0 billion. In the financial account, net foreign direct investment (FDI) flows were USD 2.0 billion, down from USD 6.4 billion the previous year. However, foreign portfolio investment saw a recovery with a net inflow of USD 11.4 billion, compared to a net outflow of USD 1.7 billion the previous year.

Net inflows under external commercial borrowings rose to USD 2.6 billion from USD 1.7 billion, and non-resident deposits increased to USD 5.4 billion from USD 3.6 billion. These factors collectively contributed to the current account surplus, highlighting financial stability and positive economic indicators for India.