India records historic current account surplus of $19.8 billion in 1QFY21

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India records historic current account surplus of $19.8 billion in 1QFY21

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India's current account posted a historic high surplus of $19.8 billion in 1QFY21 after a small surplus of $0.6 billion in the preceding quarter.
Story: Niti Kiran
Design: Pragati Srivastava

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Current account balance recorded a surplus of $19.8 billion (3.9 per cent of GDP) in Q1 of FY21 on top of a surplus of $0.6 billion (0.1 per cent of GDP) in the preceding quarter.

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The surplus was on account of a sharp contraction in the trade deficit to $10 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis.

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Capital flows reduced to almost negligible to 0.1 per cent of GDP in Q1FY21 from 2.4 per cent of GDP in Q4FY20.

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In the financial account, net foreign direct investment recorded outflow of $0.4 billion as against inflows of $14.0 billion in Q1 of FY20.

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The country added $19.8 billion to its foreign exchange reserves 1QFY21 compared with $14 billion in Q1FY20.

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Net inflow on account of non-resident deposits increased to $3 billion from $2.8 billion in Q1FY20.