Current account deficit widens to $11.5 billion in October-December quarter: RBI

During the April-December 2024 period, the current account deficit widened to $37 billion, or 1.3 per cent of GDP, from $ 30.6 billion (1.1 per cent of GDP) in the same period of 2023.

The current account deficit is the difference between exports and imports of goods and services. It is a key indicator of the country’s external sector.

In Q3 FY2025, merchandise trade deficit increased to $79.2 billion from $71.6 billion in the same period of the previous fiscal.

Net services receipts increased to $51.2 billion in the third quarter of the current fiscal, compared to $45 billion a year ago. Services exports have risen on a year-on-year basis across major categories such as business services, computer services, transportation services and travel services.

During the reporting quarter, personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to $35.1 billion, as against $30.6 billion in Q3 FY2024.

In the financial account, foreign direct investment recorded a net outflow of $2.8 billion in Q3 FY2025 as against an inflow of $4 billion in the corresponding period of 2023-24, the RBI data showed.

Foreign portfolio investment recorded a net outflow of $11.4 billion as against an inflow of $12 billion in Q3 FY2024. Net inflows under external commercial borrowings (ECBs) to India amounted to $4.3 billion in the reporting quarter, as against an outflow of $2.7 billion in the corresponding period a year ago.

Non-resident deposits (NRI deposits) recorded a net inflow of $3.1 billion, lower than $3.9 billion a year ago.

On a balance of payments (BoP) basis, there was a depletion of $37.7 billion to the foreign exchange reserves in Q3 FY 2024-25, as against an accretion of $6 billion in Q3 2023-24.