India's Current Account Deficit Sees Marginal Improvement

India's current account deficit (CAD) slightly improved to USD 11.2 billion in Q2 2024-25, down from USD 11.3 billion in the previous year. The merchandise trade deficit increased, while net services receipts and remittances saw significant rises. Net foreign portfolio investment strengthened notably to USD 19.9 billion.

India's current account deficit (CAD) has shown a marginal improvement, moderating to USD 11.2 billion or 1.2% of GDP in the July-September quarter of 2024-25, as per recent data from the Reserve Bank of India. This reflects a slight decrease from USD 11.3 billion or 1.3% of GDP in the same period last year.

While the merchandise trade deficit expanded to USD 75.3 billion, net services receipts saw an increase to USD 44.5 billion, boosted by exports in sectors such as computer and business services. Remittances also went up significantly, hitting USD 31.9 billion in the recent quarter.

Additionally, foreign portfolio investment showed a marked improvement with net inflows soaring to USD 19.9 billion, contrasting with net foreign direct investment which saw a USD 2.2 billion outflow during the period.