The Reserve Bank of India (RBI) announced on Monday that India recorded a current account surplus of USD 5.7 billion, or 0.6 percent of Gross Domestic Product (GDP), for the March quarter. This marks a significant improvement from the same period last year when the current account deficit was USD 1.3 billion or 0.2 percent of GDP. In the preceding quarter ending December 2023, the deficit stood at USD 8.7 billion or 1 percent of GDP.

For the fiscal year 2023-24 (FY24), the current account deficit notably decreased to USD 23.2 billion or 0.7 percent of GDP. This is a substantial reduction compared to the USD 67 billion or 2 percent of GDP recorded in the previous fiscal year, FY23. The RBI provided these details in its release on the Developments in India's Balance of Payments.

In January-March 2024, the merchandise trade deficit stood at USD 50.9 billion, lower than the USD 52.6 billion a year ago. Net services receipts at USD 42.7 billion were higher than the USD 39.1 billion from the previous year, showing a 4.1 percent growth in the segment. The central bank noted that this growth helped swing the current account into surplus territory. However, the net outgo on the primary income account, mainly reflecting payments of investment income, increased to USD 14.8 billion from USD 12.6 billion a year ago, according to the data released by the RBI.

Private transfer receipts, mainly representing remittances by Indians employed overseas, grew by 11.9 percent to USD 32 billion in the March quarter. Additionally, non-resident deposits surged to USD 5.4 billion in January-March compared to USD 3.6 billion in the same period last year.

Net foreign direct investment (FDI) flows were USD 2 billion in Q4 FY24 against USD 6.4 billion a year ago. Foreign portfolio investment recorded a net inflow of USD 11.4 billion during the quarter compared to a net outflow of USD 1.7 billion a year ago. Net inflows under external commercial borrowings to India were USD 2.6 billion, up from USD 1.7 billion.

For the entire fiscal year FY24, portfolio investment recorded a net inflow of USD 44.1 billion against an outflow of USD 5.2 billion in FY23. However, net FDI plummeted to USD 9.8 billion from USD 28 billion in FY23, according to the RBI.