India’s current account deficit (CAD) narrowed sharply to near zero at 0.1 per cent of GDP or $0.3 billion in Q4 of 2015-16 primarily on account of a lower trade deficit of $24.8 billion. It was $31.6 billion in the last quarter of FY15 and $34 billion in the preceding quarter. Private transfer recei-pts, mainly remittances by Indians employed overseas, amounted to $15.7 billion, a decline from their level in the preceding quarter as well as from a year ago. The fall in exports of transport, financial services and telecommunication, computer and information services lead to net services receipts declining on a y-o-y basis.

Other highlights of the BOP status included moderation in net foreign direct investment to $8.8 billion in Q4 of 2015-16 from $ 9.3 billion in Q4 of 2014-15; portfolio investment recorded a net outflow of $ 1.5 billion in Q4 of 2015-16 as against a net inflow of $ 12.5 billion in the corresponding period of last year; primarily reflecting net outflow in the debt segment. A silver lining was the non-resident Indian (NRI) deposits, that increased in Q4 of 2015-16 over their level in Q4 last year as well as the preceding quarter. Foreign excha-nge reserves (on a BoP basis) increased by $3.3 billion in Q4 of 2015-16.