The Reserve Bank of India (RBI) said India's current account deficit (CAD), a difference between foreign exchange inflows and outflows, narrowed to 0.9 per cent of gross domestic product (GDP), or $6.3 billion, in second quarter of current financial year (Q2FY20), on account of lower trade deficit. It had stood at 2.9 per cent of GDP, or $19 billion, in the corresponding quarter of 2018-19.
On a sequential basis, CAD had printed 2 per cent of GDP, or $14.2 billion, in the June 2019 quarter. The contraction in the CAD was primarily on account of a lower trade deficit at $38.1 billion as compared with $50 billion a year ago. During the first half of the FY 20, CAD narrowed to 1.5 per cent of GDP from 2.6 per cent in the corresponding period in 2018-19, on the back of a reduction in the trade deficit, which shrank to $84.3 billion as compared with $95.8 billion a year ago.
Besides, the balance of payment stood at $5.12 billion in the second quarter and $19.10 billion during the first half of this fiscal. Net foreign direct investment stood at $7.4 billion, almost the same level as in second quarter of 2018-19.
