India's Current Account Deficit Declines To 1.5% Of GDP

India's current account deficit (CAD) decreased to US$ 13.4 billion (1.5 per cent of GDP) in Q4:2021-22 from US$ 22.2 billion (2.6 per cent of GDP) in Q3:2021-22. The sequential decline in CAD in Q4:2021-22 was mainly on account of a moderation in trade deficit and lower net outgo of primary income. Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to US$ 23.7 billion, up by 13.4 per cent from their level a year ago. Net outgo from the primary income account, largely reflecting net income payments on foreign investment, decreased sequentially as well as on a y-o-y basis. In the financial account, net foreign direct investment (FDI) at US$ 13.8 billion was higher than US$ 2.7 billion in Q4:2020-21. Net foreign portfolio investment (FPI) recorded an outflow of US$ 15.2 billion - mainly from the equity market. Net external commercial borrowings (ECBs) to India were lower at US$ 3.3 billion in Q4:2021-22 as compared with US$ 6.1 billion a year ago. There was a drawdown of US$ 16.0 billion in the foreign exchange reserves (on a BoP basis) as against an accretion of US$ 3.4 billion in Q4:2020-21

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