According to Reserve Bank of India data, the country’s Current Account Deficit (CAD) widened to $7.9 billion in the Oct.-Dec. quarter.
India’s current account deficit (CAD) jumped to a four quarter high of 1.4% of gross domestic product (GDP) in the December quarter from 0.6% of GDP in the September quarter as trade deficit widened.
The CAD widened primarily on account of a decline in net invisibles receipts despite a slightly lower trade deficit on a year-on-year basis.
Net services receipts moderated on a y-o-y basis, primarily owing to the fall in earnings from software, financial services and charges for intellectual property rights.
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $15.2 billion, having declined by 3.8% from a year ago.
Despite moderation in India’s exports, India’s external sector position has been comfortable, with the CAD progressively contracting from $ 88.2 billion (4.8% of GDP) in 2012-13 to $ 22.2 billion (1.1% of GDP) in 2015-16.
