CAD moderates marginally to 1.2% of GDP in July-September of FY25: RBI data 

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India’s current account deficit (CAD) slightly reduced to $11.2 billion, or 1.2 percent of GDP, in the July-September quarter of 2024-25, as per data released by the Reserve Bank on December 27. This marks a minor decrease from the $11.3 billion CAD, or 1.3 percent of GDP, reported in the same quarter of 2023-24. 

The Reserve Bank highlighted that India’s CAD narrowed to $11.2 billion (1.2 percent of GDP) in Q2 2024-25, compared to $11.3 billion (1.3 percent of GDP) in Q2 2023-24. 

For the first half of 2024-25 (April-September), the CAD stood at $21.4 billion, or 1.2 percent of GDP, up from $20.2 billion (1.2 percent of GDP) in the corresponding period of the previous year. 

The merchandise trade deficit widened to $75.3 billion in Q2 2024-25, up from $64.5 billion in the same quarter of 2023-24, as per the Reserve Bank’s Balance of Payments data. 

Net services receipts rose to $44.5 billion in Q2 2024-25, compared to $39.9 billion in the previous year, reflecting a growth in services exports across key sectors such as computer services, business services, travel services, and transportation services. 

Private transfers, mainly comprising remittances from Indians working abroad, increased to $31.9 billion in Q2 2024-25, up from $28.1 billion in the same period of 2023-24. 

In the financial account, the RBI reported a net outflow of $2.2 billion in foreign direct investment (FDI) for Q2 2024-25, compared to a smaller outflow of $0.8 billion in Q2 2023-24. However, net inflows from foreign portfolio investment (FPI) rose significantly to $19.9 billion in Q2 2024-25, up from $4.9 billion a year earlier. 

For the first half of 2024-25, net invisible receipts totaled $119 billion, an increase from $101 billion in H1 2023-24, driven largely by higher net services receipts. FDI inflows in H1 2024-25 reached $4.4 billion, higher than the $3.9 billion recorded in the same period of the previous year. Foreign portfolio investments showed net inflows of $20.8 billion in H1 2024-25, slightly up from $20.7 billion in H1 2023-24. 

The Reserve Bank also reported an increase of $23.8 billion in India’s foreign exchange reserves during H1 2024-25, on a Balance of Payments basis. 


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