The current account deficit for July–September 2009 was marginally higher from the year-ago period despite a lower trade deficit due to the decline in net invisible receipts.
Invisible receipts declined by 15.1 per cent, against a growth of 33.1 per cent last year.
Major categories of services exports registered a decline during the quarter. Invisibles include software services receipts and non-software services receipts such as business services, construction and royalties, copyrights and licence fees.
Oil imports fall
According to the Balance of Payments data released by the Reserve Bank of India on Thursday, the trade deficit was lower at $32.2 billion for the second quarter of the fiscal 2009-10.
In the corresponding quarter last year it was $39.1 billion.
The lower trade deficit was on account of a larger fall in imports, especially oil imports, on account of lower oil prices as compared to last year.
The current account deficit was at $12.62 billion, marginally higher than $12.57 in the same period last year.
Declining trend
The exports and imports continued the declining trend during Q2 of 2009-10.
Exports declined to $42.630 billion ($53.630 billion). Import payments declined to $74.55 billion ($92.75 billion).
Oil imports declined by 45.7 per cent and non-oil imports by 27.5 per cent.
The decline in oil imports was due mainly to a significant decline in oil prices at $67.6 per barrel (in July 2008 it was at a peak of $132.5 per barrel).
Oil imports accounted for about 28.7 per cent of total imports (35 per cent).
Net invisibles were lower at $19.6 billion ($26.5 billion), due mainly to a decline in services exports, particularly non-software services receipts.
This saw a decline of $4.42 billion against a gain of $3.793 billion last year. Software services exports grew by $10.20 billion ($11.18 billion).
Net capital flows into the country were higher at $23.6 billion ($7.09 billion), due mainly to net foreign investment inflows.
Higher FDI
The net foreign direct investments flows were higher at $7.11 billion ($4.9 billion).
Portfolio investment recorded a net inflow of $9.67 billion (as against net outflows of $1.3 billion).
FII inflows
This included inflows from foreign institutional investors of $7.03 billion (against outflows of $1.43 billion) and from ADRs/GDRs of $2.66 billion ($136 million). Inflows under NRI deposits were higher at $1.04 billion ($259 million).
Source : Business Line