India Current Account Deficit Drop: India's CAD Decreases to 0.2% of GDP in Q4 From 2% in Q3 of Financial Year 2022-23, Smallest Since 2021

Mumbai, Jun 27: India's current account deficit (CAD) narrowed to USD 1.3 billion or 0.2 per cent of GDP in the January-March quarter of FY23, mainly due to moderation in the trade deficit and a robust increase in services exports, RBI data showed on Tuesday.

"India's CAD decreased to USD 1.3 billion (0.2 per cent of GDP) in Q4:2022-23 from USD 16.8 billion (2.0 per cent of GDP) in Q3:2022-23, and USD 13.4 billion (1.6 per cent of GDP) a year ago," the Reserve Bank said. CAD is a key indicator of the balance of payment of a country. RBI Repo Rate Latest Update: Reserve Bank of India Keeps Policy Repo Rate Unchanged at 6.5%, Announces Governor Shaktikanta Das.

India Records Current Account Deficit of USD 1.3 Billion

The sequential decline in CAD in the fourth quarter of the last fiscal was mainly on account of a moderation in the trade deficit to USD 52.6 billion from USD 71.3 billion in the preceding quarter, coupled with robust services exports.

Net services receipts increased, sequentially and on a year-on-year (y-o-y) basis, on the back of a rise in net earnings from computer services, the RBI said. RBI Monetary Policy Latest Update: Reserve Bank of India Retains Repo Rate at 6.5% (Watch Video).

India's Current Account Deficit Decreases

There was an accretion to the foreign exchange reserves (on a BoP basis) to the tune of USD 5.6 billion against depletion of USD 16.0 billion in Q4 2021-22.

For fiscal 2022-23, the current account balance recorded a deficit of 2 per cent of GDP compared to a deficit of 1.2 per cent in 2021-22, as the trade deficit widened to USD 265.3 billion from USD 189.5 billion a year ago.