India had a current account surplus of 0.6% in the March quarter due to increased service exports and remittances.

The Reserve Bank of India announced on Monday that India has recorded a current account surplus of $5.7 billion or 0.6% of GDP in the March quarter. This is a significant increase from the previous year, where the current account deficit stood at $1.3 billion or 0.2% of GDP. The RBI also reported that the current account deficit for the preceding quarter, ending in December 2023, was $8.7 billion or 1% of GDP.

The RBI's release on the Developments in India's Balance of Payments stated that for the fiscal year 2024, the current account deficit has narrowed down to $23.2 billion or 0.7% of GDP. This is a significant improvement from the previous year, where the deficit was $67 billion or 2% of GDP. The central bank also reported that the merchandise trade deficit for the January-March 2024 period was $50.9 billion, which is lower than the $52.6 billion recorded in the same period the year before.

The RBI pointed out that the increase in net services receipts, which stood at $42.7 billion, contributed to the current account surplus. This is a 4.1% increase from the previous year. The primary income account, which reflects the payments of investment income, also saw an increase from $12.6 billion to $14.8 billion. The RBI also reported a growth of 11.9% in private transfer receipts, which mainly represent remittances by Indians employed overseas, amounting to $32 billion in the March quarter.

The non-resident deposits also saw a surge in the January-March period, reaching $5.4 billion compared to $3.6 billion in the same period the year before. However, net foreign direct investment flows decreased from $6.4 billion to $2 billion in the Q4 FY24. On the other hand, foreign portfolio investment recorded a net inflow of $11.4 billion, a significant increase from the previous year's net outflow of $1.7 billion. The RBI also reported a net inflow of $2.6 billion in external commercial borrowings to India in the same period.

The fiscal year 2024 saw a significant improvement in portfolio investment, with a net inflow of $44.1 billion compared to the previous year's net outflow of $5.2 billion. However, net FDI saw a decline from $28 billion to $9.8 billion. The RBI believes that these developments in India's balance of payments are a positive sign for the country's economy and reflect its strong growth potential.

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