India's current account balance records surplus of USD 19.8 billion in Q1

India's current account balance (CAB) recorded a surplus of USD 19.8 billion (3.9 per cent of GDP) in the April-June quarter (Q1) of 2020-21, Reserve Bank of India (RBI) said in a press release on Wednesday.

A deficit of USD 15.0 billion (2.1 per cent of GDP) was recorded a year ago in Q1 of 2019-20.

The surplus in the current account in Q1 of 2020-21 was on account of a sharp contraction in the trade deficit to USD 10.0 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis, RBI said.

Net services receipts remained stable, primarily on the back of net earnings from computer services. Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to USD 18.2 billion, a decline of 8.7 per cent from their level a year ago, it added.

RBI further informed that net outgo from the primary income account, primarily reflecting net overseas investment income payments, increased to USD 7.7 billion from USD 6.3 billion a year ago.

In the financial account, net foreign direct investment recorded an outflow of USD 0.4 billion as against inflows of USD 14.0 billion in Q1 of 2019-20.

Net foreign portfolio investment was USD 0.6 billion as compared with USD 4.8 billion in Q1 of 2019-20 as net purchases in the equity market were offset by net sales in the debt segment.

With repayments exceeding fresh disbursals, external commercial borrowings to India recorded a net outflow of USD 1.1 billion in Q1 of 2020-21 as against an inflow of USD 6.0 billion a year ago.

Net inflow on account of non-resident deposits increased to USD 3.0 billion from USD 2.8 billion in Q1 of 2019-20.

There was an accretion of USD 19.8 billion to the foreign exchange reserves (on a BoP basis) as compared with that of USD 14.0 billion in Q1 of 2019-20.

( With inputs from ANI )