Key Features of India’s BoP in Q4:2022-23
• India’s current account deficit (CAD) decreased to US$ 1.3 billion (0.2 per cent of GDP) in Q4:2022-23 from US$ 16.8 billion (2.0 per cent of GDP) in Q3:2022-23, and US$ 13.4 billion (1.6 per cent of GDP) a year ago [i.e., Q4:2021-22].
• The sequential decline in CAD in Q4:2022-23 was mainly on account of a moderation in the trade deficit to US$ 52.6 billion in Q4:2022-23 from US$ 71.3 billion in Q3:2022-23, coupled with robust services exports.
• Net services receipts increased, both sequentially and on a year-on-year (y-o-
y) basis, on the back of a rise in net earnings from computer services.
• Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to US$ 28.6 billion, up by 20.8 per cent from their level a
year ago.
• Net outgo on the primary income account, largely reflecting net income payments on foreign investment, increased on a year-on-year basis, while showing a marginal decline sequentially.
• In the financial account, net foreign direct investment (FDI) at US$ 6.4 billion was higher than US$ 2.0 billion in Q3:2022-23, although lower than a year ago (US$ 13.8 billion).
• Net foreign portfolio investment (FPI) recorded an outflow of US$ 1.7 billion – driven by the equity segment, as compared with an outflow of US$ 15.2 billion during the corresponding period a year ago.
• Net external commercial borrowings (ECBs) to India recorded an inflow of US$ 1.7 billion, as against an outflow of US$ 2.5 billion during Q3:2022-23 and an inflow of US$ 3.3 billion in Q4:2021-22.
• There was an accretion to the foreign exchange reserves (on a BoP basis) to the tune of US$ 5.6 billion as against a depletion of US$ 16.0 billion in Q4:2021-22 (Table 1).
BoP during 2022-23
• The current account balance recorded a deficit of 2.0 per cent of GDP in 202223 as compared with a deficit of 1.2 per cent in 2021-22 as the trade deficit widened to US$ 265.3 billion from US$ 189.5 billion a year ago.
• Net invisible receipts were higher in 2022-23 due to increase in net exports of services and net private transfer receipts, even though net income outgo was higher than a year ago.
• Net FDI inflows at US$ 28.0 billion in 2022-23 were lower than US$ 38.6 billion in 2021-22.
• Net FPI recorded an outflow of US$ 5.2 billion in 2022-23 as compared with an outflow of US$ 16.8 billion a year ago.
• Net ECBs to India recorded an outflow of US$ 4.1 billion in 2022-23 as against an inflow of US$ 7.4 billion in 2021-22.
• In 2022-23, there was a depletion of US$ 9.1 billion of the foreign exchange reserves (on a BoP basis).
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Table 1: Major Items of India's Balance of Payments |
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(US$ Billion) |
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January-March 2023 P |
January-March 2022 |
2022-23 P |
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2021-22 |
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Credit |
Debit |
Net |
Credit |
Debit |
Net |
Credit |
Debit |
Net |
Credit |
Debit |
Net |
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A. Current Account |
238.0 |
239.3 |
-1.3 |
218.8 |
232.2 |
-13.4 |
921.9 |
988.8 |
-67.0 |
798.7 |
837.4 |
-38.7 |
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1. Goods |
115.8 |
168.4 |
-52.6 |
118.0 |
172.5 |
-54.5 |
456.1 |
721.4 |
-265.3 |
429.2 |
618.6 |
-189.5 |
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Of which: |
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POL |
23.8 |
50.8 |
-27.0 |
21.3 |
49.3 |
-28.0 |
97.4 |
209.4 |
-112.0 |
67.5 |
161.8 |
-94.3 |
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2. Services |
85.8 |
46.8 |
39.1 |
69.9 |
41.6 |
28.3 |
325.3 |
182.0 |
143.3 |
254.5 |
147.0 |
107.5 |
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3. Primary Income |
7.7 |
20.3 |
-12.6 |
7.2 |
15.6 |
-8.4 |
27.8 |
73.8 |
-45.9 |
25.8 |
63.0 |
-37.3 |
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4. Secondary Income |
28.6 |
3.9 |
24.8 |
23.7 |
2.6 |
21.2 |
112.6 |
11.7 |
100.9 |
89.3 |
8.8 |
80.5 |
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B. Capital Account and Financial Account |
153.4 |
152.5 |
0.9 |
182.1 |
167.8 |
14.3 |
702.9 |
634.9 |
68.0 |
777.4 |
739.2 |
38.2 |
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Of which: |
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Change in Reserves [Increase (-)/Decrease (+)] |
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5.6 |
-5.6 |
16.0 |
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16.0 |
30.4 |
21.2 |
9.1 |
16.0 |
63.5 |
-47.5 |
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C. Errors & Omissions (-) (A+B) |
0.4 |
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0.4 |
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0.9 |
-0.9 |
0.9 |
1.9 |
-1.0 |
1.4 |
1.0 |
0.5 |
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P: Preliminary. |
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Note: Total of sub-components may not tally with aggregate due to rounding off. |
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