India's current account deficit for fiscal 2017-18 widens on higher trade deficit, RBI data shows

Mumbai: India’s current account deficit (CAD) for 2017-18 has widened on the back of a higher trade deficit, Reserve Bank of India’s (RBI) data showed on Wednesday. According to the RBI data, the CAD for last fiscal widened to 1.9 percent of the GDP (Gross Domestic Product) from 0.6 percent in 2016-17. The current account is the net difference between inflows and outflows of foreign currencies. [caption id=“attachment_3868123” align=“alignleft” width=“380”] Representational images. Reuters.[/caption] Accordingly, the country’s trade deficit increased to $160 billion in 2017-18 from $112.4 billion in 2016-17. “Net invisible receipts were higher in 2017-18 mainly due to increase in net services earnings and private transfer receipts,” the RBI said in the “Developments in India’s Balance of Payments”. In terms of inflows, gross FDI (Foreign Direct Investment) into India increased to $61 billion in 2017-18 from $60.2 billion in 2016-17. However, net FDI inflows in 2017-18 fell to $30.3 billion from $35.6 billion in 2016-17. As per the RBI data, portfolio investment recorded a net inflow of $22.1 billion in 2017-18 as compared with $7.6 billion a year ago. “In 2017-18, there was an accretion of US$ 43.6 billion to the foreign exchange reserves (on a BoP basis),” RBI said.