India’s current account deficit (CAD) widened to $23.9 billion or 2.8 per cent of the country’s gross domestic product (GDP) in the April-June period of the current financial year from $13.4 billion recorded in the previous quarter, as per data released by the Reserve Bank of India (RBI) on Thursday.

India’s current account balance recorded a deficit of $23.9 billion (2.8 per cent of GDP) in Q1:2022-23, up from US$ 13.4 billion (1.5 per cent of GDP) in Q4:2021-221 and a surplus of $6.6 billion (0.9 per cent of GDP) a year ago [i.e., Q1:2021-22], the RBI said in a statement.

The RBI on Thursday released the preliminary data on India’s balance of payments (BoP) for the first quarter (Q1), i.e., April-June 2022-23.

Underlying the current account deficit in Q1:2022-23 was the widening of the merchandise trade deficit to $68.6 billion from $54.5 billion in Q4:2021-22 and an increase in net outgo of investment income payments.

Net services receipts increased, both sequentially and on a year-on-year (y-o-y) basis, on the back of rising exports of computer and business services.

Services exports grew y-o-y by 35.4 per cent, led by broad-based growth in computer, business, transportation, and travel services.

Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $25.6 billion, an increase of 22.6 per cent from their level a year ago.

Net outgo on the income account, primarily reflecting payments of investment income, increased to $9.3 billion from $7.5 billion a year ago.

In the financial account, net foreign direct investment increased to $13.6 billion from $11.6 billion a year ago.

Net foreign portfolio investment recorded outflows of $14.6 billion as against net inflows of $0.4 billion during Q1:2021-22.

Net external commercial borrowings to India recorded an outflow of $3.0 billion in Q1:2022-23 as against an inflow of $0.2 billion a year ago. Non-resident deposits recorded net inflows of $0.3 billion as compared with $2.5 billion in Q1:2021-22.

There was an accretion of $4.6 billion to the foreign exchange reserves (on a BoP basis) in Q1:2022-23 as compared with $31.9 billion in Q1:2021-22, the RBI data showed.