High trade deficit pushes India's Q3 CAD to $16.9 billion

Mumbai: India's current account deficit (CAD) widened to $16.9 billion during the third quarter of 2018-19 from $13.7 billion reported in the corresponding period of 2017-18, the Reserve Bank of India (RBI) data showed on Friday.

However, on a sequential basis, the Q3 CAD moderated from a higher level of $19.1 billion reported in the previous July-September quarter of FY19.

"India's current account deficit at $16.9 billion (2.5 per cent of GDP) in Q3 of 2018-19 increased from $13.7 billion (2.1 per cent of GDP) in Q3 of 2017-18, but moderated from $19.1 billion (2.9 per cent of GDP) in the preceding quarter," the RBI said in its statement on developments in India's Q3 balance of payments (BoP).

"The widening of the CAD on a year-on-year (Y-o-Y) basis was primarily on account of a higher trade deficit at $49.5 billion as compared with $44 billion a year ago."

According to the RBI, net services receipts increased by 2.8 per cent on a Y-o-Y basis mainly on the back of a rise in net earnings from telecommunications, computer and information services and financial services.

"Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $18.7 billion, increasing by 6.3 per cent from their level a year ago," the RBI said.

"In the financial account, net foreign direct investment at $7.5 billion in Q3 of 2018-19 increased from $4.3 billion in Q3 of 2017-18."