India's current account deficit widens to $9.7 billion in the first quarter of fiscal year 2024, mainly due to a rise in merchandise trade deficit. This is a key indicator of the country's external sector and shows an increase from the $8.9 billion deficit in the same quarter last year. At the same time, net foreign direct investment inflows have increased to $6.3 billion and net external commercial borrowings have decreased to $1.8 billion in the current quarter. Non-resident deposits have also increased to $4 billion.
India's Current Account Deficit Widens to $9.7 Billion, Sparking Concerns
India's current account deficit, a key indicator of the country's external sector, has widened to $9.7 billion in the first quarter of fiscal year 2024, according to data from the Reserve Bank of India (RBI). This marks an increase from the $8.9 billion deficit recorded in the same quarter of the previous fiscal year.
The widening deficit is primarily attributable to a surge in merchandise trade deficit, which reached $113.1 billion during the quarter. This was driven by a sharp rise in imports and a modest growth in exports. The trade deficit was further exacerbated by a decline in net services exports.
Despite the widening current account deficit, there are positive signs in other areas of the external sector. Net foreign direct investment (FDI) inflows increased to $6.3 billion, while net external commercial borrowings (ECBs) declined to $1.8 billion. Non-resident deposits also rose to $4 billion.
Background
A current account deficit occurs when a country imports more goods and services than it exports. This deficit can be financed through inflows of foreign capital, such as FDI, ECBs, and remittances.
India's current account deficit has been a concern for policymakers in recent years, as it can lead to currency depreciation and put pressure on the country's foreign exchange reserves. The widening deficit in the first quarter of FY24 raises concerns about the sustainability of India's external sector in the face of rising global uncertainty and geopolitical tensions.
Top 5 FAQs
1. What is the significance of the current account deficit?
The current account deficit is a measure of the country's net trade in goods and services, and indicates whether the country is a net borrower or lender in the international financial markets.
2. Why has India's current account deficit widened?
The widening deficit is mainly due to a surge in merchandise trade deficit, caused by a rise in imports and a modest growth in exports.
3. What are the implications of a widening current account deficit?
A widening current account deficit can lead to currency depreciation, put pressure on foreign exchange reserves, and increase the country's external debt burden.
4. What measures can be taken to address the widening deficit?
Policymakers can take measures to promote exports, reduce imports, and attract foreign capital to finance the deficit.
5. What is the outlook for India's current account deficit?
The outlook for India's current account deficit is uncertain, but it is likely to remain elevated in the near term due to factors such as rising global commodity prices and geopolitical uncertainties.
President Trump announced new tariffs on major trading partners, including India and China, during a speech at the White House on April 2. These "reciprocal tariffs" match the duties these countries have imposed on US goods, with India set to face a 26% tariff and China set at 34%. The tariffs will go into effect on April 9 at 12:01 am local time, sparking concerns for industries such as automobiles, with companies like Volkswagen already taking action to mitigate the impact.
Enter this month's competition for a chance to win one of two fantastic Motorola Edge 50 Pro handsets worth £600 each. With its sleek design, impressive camera system and fast charging capabilities, this phone is not to be missed. Plus, each winner will receive a limited-edition F1 engraved case to complete the package. All you have to do is answer a simple question on motorola.co.uk.
According to the Comptroller and Auditor General of India's report, state-owned telecom company BSNL incurred a loss of Rs 1,757.76 crore due to financial lapses in its Master Service Agreement with Reliance Jio Infocomm Ltd (RJIL). These lapses include BSNL's failure to enforce contractual terms, leading to revenue shortages and loss of potential interest. The report also highlights additional losses incurred by BSNL due to inefficient planning and procurement, resulting in unnecessary expenditure and non-realization of tax credits.
The National Company Law Tribunal has intervened in the ongoing dispute between Aakash Education Services Limited and Byju's, directing a status quo on the former's shareholding. This move came after the Resolution Professional of Byju's filed a plea in court. As one of India's leading ed-tech companies, Byju's has been aggressive in its acquisition of competitors such as Aakash Institute, and this development adds to the ongoing legal battles in the business world.
FOX News Network, LLC has announced exclusive offers for members of the military and first responders on their streaming platform, FOX Nation. The offers include discounted rates and additional benefits for those who serve in these roles. To learn more and take advantage of these offers, interested individuals can contact the designated help centers or visit the FAQ page on the FOX News website. With this initiative, FOX News continues to show their support for those who serve and protect their communities.
The Brihanmumbai Municipal Corporation (BMC) exceeded expectations by collecting Rs 6,172 crore in property tax in the financial year 2024-25. This marks a 30% increase compared to the previous year and is the highest ever collection for India's largest civic body. BMC officials attribute the success to consistent follow-ups, enhanced recovery measures, and citizen compliance. Despite facing financial strain, tax rates in Mumbai have remained unchanged since 2015, leading the BMC to explore other revenue sources.
Following a long wait, the Staff Selection Commission (SSC) has finally declared the final results of the Combined Graduate Level Examination (CGL) 2024,which was held on 12.03.2025. Out of 1267 candidates whose results were withheld, the SSC has released the scores for 219 candidates on its official website. The remaining results are still pending for further scrutiny, and candidates can check their scorecards by logging into the website using their registration number and password.
In a major move to revive the struggling telecom company Vodafone Idea (Vi), the Indian government has decided to convert an additional Rs 36,950 crore of the company's dues into equity, bringing the government's total stake in the company to nearly 49%. This follows a previous infusion of Rs 6,133 crore in equity in February 2023. With this takeover, the government becomes the single-largest shareholder in Vi and will continue to have operational control of the company. However, this decision has raised concerns about potential losses for taxpayers, as the government will have to acquire these shares at a premium of more than 47%.
The debut of Mubarak Coin on Binance, the world's largest crypto exchange, was met with unexpected results as the token crashed by 40% in just 24 hours. This sudden drop has sparked intense discussions among investors, with some seeing it as a normal correction and others fearing a larger shakeout. The token's listing on Binance was expected to boost its price, but instead, it triggered a sell-off by whales (large investors) taking profits, leading to panic selling. Some traders who hoped to ride the wave for huge profits in the futures market were left disappointed as insiders allegedly dumped large amounts of the crypto, further causing price declines. Technical indicators suggest that the selling pressure is likely to continue.
Fox News Network, LLC has announced new offers for both military members and first responders. These discounts will be available on their streaming service, Fox Nation, and can be accessed by contacting the online representatives or through the FAQ section on the network's website. This move comes amid the company's efforts to expand its audience and cater to different demographics.