India Sees Current Account Surplus in First Quarter of 2024-25 Amid Trade Challenges
India records a current account surplus of $13.5 billion in Q4 2024-25, reversing a four-quarter deficit trend. While merchandise trade deficit widened, services exports and personal transfers boosted the surplus. The 2024-25 annual current account deficit shrinks to $23.3 billion, aided by increased net invisibles receipts.
- Country:
- India
In a surprising turnaround, India posted a current account surplus of USD 13.5 billion, accounting for 1.3 percent of its GDP, in the January-March quarter of 2024-25. This marks the country's first positive current account position in four quarters, as revealed by the Reserve Bank of India on Friday.
The surplus emerges despite a higher merchandise trade deficit of USD 59.5 billion compared to the previous year's USD 52 billion, although it showed improvement from the preceding quarter's USD 79.3 billion shortfall. Services exports and personal transfer receipts, which surged to USD 53.3 billion and USD 33.9 billion respectively, significantly contributed to the positive balance.
Net investment income outflow moderated to USD 11.9 billion, aiding the current account's performance. Foreign direct investment net inflows declined to USD 0.4 billion, while foreign portfolio investment saw a net outflow of USD 5.9 billion. Overall, India's current account deficit for 2024-25 diminished to USD 23.3 billion, driven by robust net invisibles receipts, amidst expectations of a return to deficit in the upcoming quarter.
(With inputs from agencies.)
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