Developments in India’s Balance of Payments during the Fourth Quarter (January-March) of 2020-21

Preliminary data on India’s balance of payments (BoP) for the fourth quarter (Q4), i.e., January-March 2020-21, are presented in Statements I (BPM6 format) and II (old format).

Key Features of India’s BoP in Q4:2020-21

  • India’s current account balance (CAB) recorded a deficit of US$ 8.1 billion (1.0 per cent of GDP) in Q4:2020-21 as against a surplus of US$ 0.6 billion (0.1 per cent of GDP) in Q4:2019-20 and a deficit of US$ 2.2 billion (0.3 per cent of GDP) in the preceding quarter, i.e., Q3:2020-21.
  • The current account deficit in Q4:2020-21 was primarily on account of a higher trade deficit and lower net invisible receipts than in the corresponding period of the previous year.
  • Net services receipts increased on the back of a rise in net earnings from computer, transport and business services on a year-on-year basis.
  • Private transfer receipts, mainly representing remittances by Indians employed overseas, increased to US$ 20.9 billion, up by 1.7 per cent from their level a year ago.
  • Net foreign portfolio investment (FPI) increased by US$ 7.3 billion – mainly on account of net purchases in the equity market – as against a decline of US$ 13.7 billion in Q4:2019-20.
  • Net external commercial borrowings to India was lower at US$ 6.1 billion in Q4:2020-21 as compared with US$ 9.4 billion a year ago.
  • There was an accretion of US$ 3.4 billion to the foreign exchange reserves (on a BoP basis) as compared with an accretion of US$ 18.8 billion in Q4:2019-20 (Table 1).

BoP during 2020-21

  • The current account balance recorded a surplus of 0.9 per cent of GDP in 2020-21 as against a deficit of 0.9 per cent in 2019-20 on the back of a sharp contraction in the trade deficit to US$ 102.2 billion from US$ 157.5 billion in 2019-20.
  • Net invisible receipts were lower in 2020-21 due to increase in net outgo of overseas investment income payments and lower net private transfer receipts, even though net services receipts were higher than a year ago.
  • Net FDI inflows at US$ 44.0 billion in 2020-21 were higher than US$ 43.0 billion in 2019-20.
  • Net FPI increased by US$ 36.1 billion in 2020-21 as compared to US$ 1.4 billion a year ago.
  • External commercial borrowings to India recorded inflow of US$ 0.2 billion as compared with US$ 21.7 billion in 2019-20.

  • In 2020-21, there was an accretion of US$ 87.3 billion to foreign exchange reserves (on a BoP basis).

(Yogesh Dayal)     
Chief General Manager

Press Release: 2021-2022/454


Table 1: Major Items of India’s Balance of Payments
(US$ Billion)
  January-March 2021 P January-March 2020 2020-21 P 2019-20
  Credit Debit Net Credit Debit Net Credit Debit Net Credit Debit Net
A. Current Account 173.4 181.5 -8.1 157.1 156.5 0.6 603.5 579.5 24.0 642.1 666.7 -24.6
1. Goods 91.3 133.0 -41.7 76.5 111.6 -35.0 296.3 398.5 -102.2 320.4 477.9 -157.5
    Of which:                        
          POL 8.0 28.7 -20.7 9.1 33.8 -24.7 25.5 82.6 -57.1 41.3 130.6 -89.3
2. Services 56.0 32.5 23.5 53.1 31.0 22.0 206.1 117.5 88.6 213.2 128.3 84.9
3. Primary Income 5.2 13.9 -8.7 7.0 11.8 -4.8 20.8 56.8 -36.0 25.2 52.4 -27.3
4. Secondary Income 20.9 2.1 18.9 20.6 2.2 18.4 80.3 6.8 73.6 83.4 8.0 75.3
B. Capital Account and Financial Account 162.7 153.8 8.8 176.3 177.8 -1.5 599.0 622.7 -23.7 610.0 586.5 23.6
   Of which:                        
Change in Reserves (Increase (-)/Decrease (+)) 0.0 3.4 -3.4 0.0 18.8 -18.8 0.0 87.3 -87.3 0.0 59.5 -59.5
C. Errors & Omissions (-) (A+B)   0.7 -0.7 0.9   0.9   0.3 -0.3 1.0   1.0
P: Preliminary
Note: Total of subcomponents may not tally with aggregate due to rounding off.

COMMENTS