| |
India’s
balance of payments position has remained comfortable during 2007- 08 so
far. The merchandise trade deficit, on balance of payments basis,
increased from US$ 16.9 billion in April-June 2006 to US$ 21.6 billion
in April-June 2007. Net surplus on the invisibles account exhibited
buoyancy during the first quarter of 2007-08, led by exports of
software, business services and private remittances, and continued to
finance a large part (78.2 per cent) of the merchandise trade deficit.
Despite large
merchandise trade deficit, higher net invisible surplus contained the
current account deficit (US$ 4.7 billion) during the first quarter of
2007-08 at broadly the same level (US$ 4.6 billion) as in the first
quarter of 2006-07. The current account deficit was financed by capital
flows that have remained large during 2007-08 so far.
|
India’s Merchandise Trade
(In $ billion)
|
|
Item |
2005-06 |
2006-07 |
2006-07 |
2007-08 |
|
|
|
|
|
April-December |
|
Exports |
103.1 |
126.4 |
50.3 |
91.2 |
|
Imports |
149.2 |
185.7 |
70.2 |
134.5 |
|
Oil |
44.0 |
57.1 |
24.4 |
49.3 |
|
Non-oil |
105.2 |
128.6 |
45.8 |
119.5 |
|
Trade Balance |
-46.1 |
-59.4 |
-19.9 |
57.8 |
|
Non-Oil Trade Balance |
-13.8 |
-20.9 |
-3.9 |
– |
|
Variation (per cent) |
|
Exports |
23.4 |
22.6 |
27.1 |
21.7 |
|
Imports |
33.8 |
24.5 |
20.6 |
25.9 |
|
Oil |
47.3 |
30.0 |
44.5 |
11.7 |
|
Non-oil |
28.8 |
22.2 |
10.9 |
32.9 |
|
– : Not Available.
Source: DGCI&S. |
During 2007-08
(up to October 19, 2007), net inflows by FIIs amounted to US $21.2
billion as compared with outflows of US $ 933 million in the
corresponding period of 2006-07. FDI inflows were US $ 6.6 billion
during April-July 2007 (US $ 3.7 billion a year ago). On the other hand,
non-resident Indian deposits registered net outflows amounting to US $
148 million during April-July 2007 as against net inflows of US $ 1.6
billion during April-July 2006.
During 2007-08 so
far (April-December), growth of merchandise exports moderated, while
imports posted a high growth rate. Non-oil imports registered high
growth due to robust growth in capital goods. Oil imports registered a
sharp deceleration from the strong growth recorded during the
corresponding period of the previous year.
Net surplus under invisibles (services, transfers and income taken
together) exhibited buoyancy during the first quarter of 2007-08,
showing an increase of 36.4 per cent. Exports of services and higher
transfer receipts comprising mainly remittances remained the key drivers
of the net surplus. Amongst services, both software and business
services continued to record robust growth. Private transfers during
April-June 2007 increased by over 45 per cent over the corresponding
quarter of 2006-07.
|
Invisibles Account (Net)
($ million)
|
|
Item |
2006-07 P |
2006-07 |
2007-08 |
|
|
April- |
April- |
July- |
Oct.- |
Jan- |
April- |
|
|
March |
June PR |
Sept. PR |
Dec. PR |
March P |
June P |
|
Services |
32,727 |
7,965 |
7,268 |
7,467 |
10,027 |
9,150 |
|
Travel |
2,188 |
220 |
-31 |
792 |
1,207 |
207 |
|
Transportation |
-788 |
-314 |
-31 |
-255 |
-188 |
-484 |
|
Insurance |
559 |
111 |
162 |
92 |
194 |
233 |
|
Government, not included elsewhere |
-144 |
-24 |
-62 |
-11 |
-47 |
-16 |
|
Software |
28,798 |
6,601 |
6,678 |
6,864 |
8,655 |
7,884 |
|
Other Services |
2,114 |
1,371 |
552 |
-15 |
206 |
1,326 |
|
Transfers |
27,415 |
5,692 |
5,226 |
7,844 |
8,653 |
8,327 |
|
Investment Income |
-4,282 |
-1,147 |
-1,300 |
-1,088 |
-747 |
-486 |
|
Compensation of Employees |
-564 |
-131 |
-162 |
-133 |
-138 |
-108 |
|
Total |
55,296 |
12,379 |
11,032 |
14,090 |
17,795 |
16,883 |
|
P : Preliminary. PR : Partially Revised. |
The
net invisible surplus offset a large part of the trade deficit – 78.2
per cent during April-June 2007 as compared with 73 per cent during the
corresponding period of the previous year. Despite large merchandise
trade deficit, higher net invisible surplus, mainly emanating from
private transfers, contained the current account deficit at US $ 4.7
billion in the first quarter of 2007-08, broadly at the same level as in
the first quarter of 2006-07. Net of remittances, the current account
deficit was US $ 13.0 billion during April-June 2007.
|
India’s Balance of Payments
(US $ million)
|
|
|
Item |
2006-07 P |
2006-07 |
2007-08 |
|
|
|
April- |
April- |
July- |
Oct.- |
Jan- |
April- |
|
|
|
March |
June PR |
Sept. PR |
Dec. PR |
March P |
June P |
|
|
Exports |
127,090 |
29,674 |
32,700 |
30,664 |
34,052 |
34,960 |
|
|
Imports |
191,995 |
46,620 |
48,562 |
47,529 |
49,284 |
56,540 |
|
|
Trade Balance |
-64,905 |
-16,946 |
-15,862 |
-16,865 |
-15,232 |
-21,580 |
|
|
|
(-7.1) |
|
|
|
|
|
|
|
Invisible Receipts |
119,163 |
24,643 |
25,597 |
31,658 |
37,265 |
31,432 |
|
|
Invisible Payments |
63,867 |
12,264 |
14,565 |
17,568 |
19,470 |
14,549 |
|
|
Invisibles, net |
55,296 |
12,379 |
11,032 |
14,090 |
17,795 |
16,883 |
|
|
|
(6.0) |
|
|
|
|
|
|
|
Current Account |
-9,609 |
-4,567 |
-4,830 |
-2,775 |
2,563 |
-4,697 |
|
|
|
(-1.1) |
|
|
|
|
|
|
|
Capital Account (net)* |
46,215 |
10,946 |
7,100 |
10,280 |
17,889 |
15,897 |
|
|
of which: |
|
|
|
|
|
|
|
|
Foreign Direct Investment |
8,437 |
1,416 |
2,426 |
2,558 |
2,037 |
461 |
|
|
Portfolio Investment |
7,062 |
-505 |
2,152 |
3,569 |
1,846 |
7,458 |
|
|
External Commercial Borrowings + |
16,084 |
3,959 |
1,458 |
3,994 |
6,673 |
7,048 |
|
|
Short-term Trade Credit |
3,275 |
417 |
1,554 |
-316 |
1,620 |
1,048 |
|
|
External Assistance |
1,770 |
49 |
337 |
633 |
751 |
258 |
|
|
NRI Deposits |
3,895 |
1,231 |
797 |
1,236 |
631 |
-447@ |
|
|
Change in Reserves # |
-36,606 |
-6,379 |
-2,270 |
-7,505 |
-20,452 |
-11,200 |
|
|
Memo: |
|
|
|
|
|
|
|
|
Current Account net of Private Transfers |
-36,804 |
- 10,280 |
-10,047 |
-10,429 |
-6,048 |
-13,037 |
|
|
|
(-4.0) |
|
|
|
|
|
|
|
P : Preliminary. PR : Partially Revised.
* : Includes errors and omissions. # : On balance of payments
basis (excluding valuation); (-) indicates increase.
+ : Medium and long-term borrowings. @ : Includes Non-resident
Rupee Deposits for April June 2007.
Note : Figures in parentheses are percentages to GDP. |
|
| |
| |
| |
The net invisible surplus offset a large part of the trade deficit –
78.2 per cent during April-June 2007 as compared with 73 per cent during
the corresponding period of the previous year. Despite large merchandise
trade deficit, higher net invisible surplus, mainly emanating from
private transfers, contained the current account deficit at US $ 4.7
billion in the first quarter of 2007-08, broadly at the same level as in
the first quarter of 2006. Net of remittances, the current account
deficit was US $ 13.0 billion during April-June 2007.
India’s foreign
exchange reserves were US $ 261.1 billion as on October 19, 2007,
showing an increase of US $ 62.0 billion over end-March 2007 level.
Source:
Reserve Bank of India
|
India's Foreign
Trade: 2006-07
(In $ million) |
| |
|
Exports |
| 2005-06 |
100606.92 |
| 2006-07* |
124629.48 |
| Y-O-Y Growth |
23.88 |
|
Imports |
| 2005-06 |
140237.65 |
| 2006-07* |
181368.26 |
| Y-O-Y Growth |
39.00 |
| Trade
Balance |
| 2005-06 |
| |