homefinance NewsIndia's current account deficit narrows to 2.2 percent in third quarter

India's current account deficit narrows to 2.2 percent in third quarter

A 40 percent surge in services exports and a 33 percent rise in remittances are instrumental in a lower current account deficit (CAD).

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By Latha Venkatesh  Mar 31, 2023 7:26:17 PM IST (Published)

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India's current account deficit narrows to 2.2 percent in third quarter
India's current account deficit in the third or the October-December quarter fell to 2.2 percent of GDP (Gross Domestic Product) from a high of 3.7 percent in the second quarter and 2.7 percent a year ago in the third quarter. The improvement in the external deficit was on account of a sharp 40 percent rise in service exports to $38.7 billion.

Within services, software services grew 18 percent year-on-year to $33.5 billion while a smaller category called business services, which comprises non-software outsourcing into India, quadrupled from $1.5 billion last third quarter to $6.07 billion in the current year.
Remittances from Indians living abroad soared 34 percent to $28.6 billion. India's capital account saw a net inflow of $30 billion, thanks to higher foreign portfolio investments, NRI deposits, and loans raised by Indian companies. The balance of payments saw a surplus of $11 billion, versus a minor $285 million inflow in the third quarter of last fiscal.

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