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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.
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External commercial borrowings to India recorded inflow of US$ 0.2 billion as compared with US$ 21.7 billion in 2019-20.
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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. |
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COMMENTS (5)