Mumbai, December 31: Larger merchandise trade deficits pushed India’s current account in the second quarter of FY22 into negative territory, official data showed on Friday.
The current account went into negative territory with a deficit of $ 9.6 billion in T2FY22 against a surplus of $ 6.6 billion in the previous quarter.
On a year-over-year basis, the country’s balance of payments was in surplus of $ 15.3 billion in Q2FY21.
“The current account deficit in the second quarter of 2021-22 was mainly due to the widening of the trade deficit to $ 44.4 billion from $ 30.7 billion in the previous quarter and to an increase in net investment income outflows. “the RBI said in a statement.
“Net service revenue declined slightly from the previous quarter, but increased year-on-year, driven by strong performance in IT and business services exports.”
However, private transfer receipts, mainly representing remittances from Indians employed abroad, amounted to $ 21.1 billion, an increase of 3.7 percent from their level there. a year ago.
“Net outflows from the primary income account, mainly reflecting net payments of investment income abroad, have increased sequentially as well as year-on-year.”
In the financial account, net foreign direct investment registered an inflow of $ 9.5 billion, down from $ 24.4 billion a year ago.
“Net foreign portfolio investment was $ 3.9 billion, up from $ 7 billion in the second quarter of 2020-2021.
“Net foreign commercial borrowing to India entered $ 4.1 billion in the second quarter of 2021-22 compared to an outflow of $ 3.7 billion a year ago.”
Net inflows of deposits from non-residents declined to $ 0.8 billion from $ 1.9 billion in the second quarter of FY21.