New Delhi / Mumbai: India’s current account showed a surplus for the first time in two years in the three months through March as software exports and remittances helped finance a lower trade deficit.
The measure of trade and investment flows posted a surplus of $4.7 billion (Rs22,513 crore), compared with a deficit of $13 billion in the previous quarter, the Reserve Bank of India, or RBI, said in a statement in Mumbai on Tuesday. India last had a current account surplus of $4.25 billion in the three months to March 2007. Analysts expected a surplus of $2.97 billion.
The current account balance witnessed a turnaround due to lower trade deficit and sustained support from surplus in invisibles account, RBI said. The net surplus under invisibles not only fully financed the lower trade deficit, but also led to a surplus in the current account.
Inflows from the so-called invisibles, including software exports and remittances, were $19.3 billion, compared with $20.8 billion a year earlier, according to the statement. The trade deficit in the quarter narrowed to $14.6 billion from $22.3 billion due to a decline in imports.
India’s current account deficit widened to $29.8 billion in fiscal 2009, compared with a deficit of $17 billion, RBI said.
The nation’s capital account continued to be negative for the second quarter in a row. The gauge of investment flows into and out of the country showed a shortfall of $4.44 billion in the three months to 31 March, compared with a net inflow of $26.5 billion a year earlier, RBI said.
The deficit in the overall balance of payments narrowed to $300 million in the three months to March 2009, compared with a shortfall of $25 billion a year earlier and a surplus of $17.9 billion in the previous quarter.