India's current account deficit (CAD) dropped sharply to $300 million or 0. 1 per cent of GDP in the fourth quarter of 2015 - 16 on account of lower trade deficit, Reserve Bank of India (RBI) said here on Thursday.
"India's CAD narrowed sharply to $0. 3 billion (0. 1 per cent of GDP) in Q4 of 2015 - 16, significantly lower than $7. 1 billion (1. 3 per cent of GDP) in Q3 of 2015 - 16 and marginally lower than $0. 7 billion (0. 1 per cent of GDP) in Q4 of 2014 - 15, " RBI said in a statement.
"The contraction in CAD was primarily on account of a lower trade deficit ($24. 8 billion) than in Q4 of last year ($31. 6 billion), " it said.
The RBI also said foreign exchange reserves (on a balance of payment basis) increased by $3. 3 billion in January - March quarter of 2015 - 16.
On a cumulative basis, the CAD contracted to 1. 1 per cent of GDP in 2015 - 16 from 1. 8 per cent in 2014 - 15, on the back of contraction in the trade deficit.
"Net services receipts declined on a year - on - year basis largely due to fall in exports of transport, financial services and telecommunication, computer and information services, " it said.
In 2015 - 16, there was an accretion of $17. 9 billion to foreign exchange reserves (on a balance of payment basis), as compared to $61. 4 billion in 2014 - 15.
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $ 15. 7 billion, a decline from their level in the preceding quarter as well as from a year ago.
Net foreign direct investment (FDI) moderated in fourth quarter of 2015 - 16 and stood at $8. 8 billion from $9. 3 billion in corresponding quarter of 2014 - 15.
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