India Posts Current Account Surplus Of $13.5 Billion In Q4FY25: RBI Data

India posted a current account surplus of USD 13.5 billion or 1.3 per cent of GDP in March quarter 2024-25 as compared with USD 4.6 billion in the year-ago period mainly on account of surge in services exports and higher remittances, according to RBI data released on Friday.

However, on annual basis, the current account was in deficit at USD 23.3 billion (0.6 per cent of GDP) during 2024-25, said the 'India's Balance of Payments during the Fourth Quarter (January-March) of 2024-25' released by Reserve Bank of India.

"India's current account balance recorded a surplus of USD 13.5 billion (1.3 per cent of GDP) in Q4:2024-25 as compared with USD 4.6 billion (0.5 per cent of GDP) in Q4:2023-24 and against a deficit of USD 11.3 billion (1.1 per cent of GDP) in Q3:2024-25," RBI said.

Balance of Payments is an indicator of the country's external payment scenario.

Merchandise trade deficit at USD 59.5 billion in Q4:2024-25 was higher than USD 52 billion in Q4:2023-24. However, it moderated from USD 79.3 billion in Q3:2024-25.

"Net services receipts increased to USD 53.3 billion in Q4:2024-25 from USD 42.7 billion a year ago. Services exports have risen on a y-o-y basis in major categories such as business services and computer services," RBI said.

Personal transfer receipts, mainly representing remittances by Indians employed overseas, rose to USD 33.9 billion in Q4:2024-25 from USD 31.3 billion in Q4:2023-24.

It further said the net outgo on the primary income account, primarily reflecting payments of investment income, moderated to USD 11.9 billion in Q4:2024-25 from USD 14.8 billion in Q4:2023-24.

In the financial account, foreign direct investment (FDI) recorded a net inflow of USD 400 million in Q4:2024-25 as compared to an inflow of USD 2.3 billion in the corresponding period of 2023-24.

Foreign portfolio investment (FPI) recorded a net outflow of USD 5.9 billion in Q4:2024-25 as against a net inflow of USD 11.4 billion in Q4:2023-24.

There was an accretion of USD 8.8 billion to the foreign exchange reserves (on a BoP basis) in Q4:2024-25 as compared to an accretion of USD 30.8 billion in Q4:2023-24.

On Balance of Payments (BoP) during 2024-25, RBI said India's current account deficit at USD 23.3 billion (0.6 per cent of GDP) during 2024-25 was lower than USD 26 billion (0.7 per cent of GDP) during 2023-24, primarily due to higher net invisibles receipts.

Net inflow under FDI at USD 1 billion during 2024-25 was lower than USD 10.2 billion during 2023-24.

During 2024-25, FPI recorded a net inflow of USD 3.6 billion, lower than USD 44.1 billion a year ago.

Commenting on the data, Aditi Nayar, Chief Economist, ICRA said while the current account balance expectedly reported a seasonal surplus in Q4 FY2025, the size of the same overshot expectations, amid a surprise dip in primary income outflows in the quarter.

Amid expectations of a widening in the merchandise trade deficit as well as a moderation in the services trade surplus in Q1 FY2026 vis-a-vis Q4 FY2025, "we expect the current account to revert to a deficit in the ongoing quarter", she said.

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