The country’s current account surplus rose to $19.8 billion or 3.9 per cent of GDP in the June quarter as merchandise imports declined amid the COVID-19 pandemic, the Reserve Bank of India said on Wednesday. The surplus came on top of a surplus of $0.6 billion (0.1 per cent of GDP) in the preceding quarter, the RBI added.
“The surplus in the current account in Q1 of 2020-21 was on account of a sharp contraction in the trade deficit to $10.0 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis,” RBI said in a statement. Net services receipts remained stable, primarily on the back of net earnings from computer services, RBI said.
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to $18.2 billion, a decline of 8.7 per cent from their level a year ago, the central bank said.
Net foreign portfolio investment was $0.6 billion as compared with $4.8 billion in Q1 of 2019-20 as net purchases in the equity market were offset by net sales in the debt segment, RBI added.