India's current account deficit narrows marginally to 1.2% of GDP in Q2: RBI data

India’s current account deficit marginally narrowed to 1.2% of GDP in the July-September quarter of FY2024-25 from 1.3% in the same period last year, according to preliminary balance of payments data released by the Reserve Bank of India (RBI) on Friday.

For the first half of FY2024-25 (April-September), the CAD stood at $21.4 billion, maintaining its level at 1.2% of GDP compared to the same period last year.

The merchandise trade deficit widened to $75.3 billion in Q2 FY2024-25, compared to $64.5 billion in the corresponding quarter of the previous fiscal.

However, robust growth in services exports, including computer services, business services, travel, and transportation, boosted net services receipts to $44.5 billion from $39.9 billion a year ago.

Indian workers abroad continued to send record remittances as private transfer receipts rose to $31.9 billion, compared to $28.1 billion in the same quarter last year.

Strong service exports and higher remittances pushed net invisible receipts to $119.0 billion in the first half, up from $101.0 billion a year ago.

Meanwhile, foreign direct investment (FDI) saw a net outflow of $2.2 billion during the second quarter, compared to a $0.8 billion outflow last year. On the other hand, foreign portfolio investment (FPI) witnessed a sharp rise, with net inflows surging to $19.9 billion from $4.9 billion in Q2 FY2023-24.