India's current account surplus rose to $19.8 billion or 3.9 percent of GDP (gross domestic product) in the June quarter as merchandise imports declined sharply amid the COVID-19 pandemic, the Reserve Bank of India said on Wednesday.
The current account records a country's transactions with the rest of the world (in net trade in goods and services, net earnings on cross-border investments, and net transfer payments) over a period of time- like a year or a quarter of a year. When the balance is positive, it is a surplus and when it is negative, it is a deficit.
The current account surplus stood at $0.6 billion or 0.1 percent of GDP in the March quarter while there was a current account deficit of $15 billion or 2.1 percent of GDP in the year-ago period.
"The surplus in the current account in Q1 of 2020-21 was on account of a sharp contraction in the trade deficit to $10.0 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis," Reserve Bank of India said.
During the April-June period, when parts of the country were in complete lockdown for most of the year, India imported goods worth $62.3 billion, and exported goods worth $52.3 billion, leading to a $10 billion trade deficit. In comparison, in the same quarter last year, the country imported and exported goods worth $129.5 billion and $82.7 billion, respectively, leading to a $46.8 billion trade deficit.
Services sector's inflows remained stable at $46.8 and outflows were at $26.3, leading to a $20.5 billion surplus.
Net outgo from the primary income account, primarily reflecting net overseas investment income payments, rose to $ 7.7 billion from $ 6.3 billion a year ago.
Private transfer receipts, which mainly include remittances by Indians employed overseas, amounted to $ 18.2 billion, a decline of 8.7 percent from their level a year ago.