India's current account deficit (CAD) narrowed to 0.9 per cent of GDP, or $6.3 billion, in the September 2019 quarter, on account of lower trade deficit.
It had stood at 2.9 per cent of gross domestic product (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 current account deficit is the difference between foreign exchange inflows and outflows.
"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," the Reserve Bank of India (RBI) said in a release on Tuesday.
During the first half of the current financial year, 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. The trade deficit is the gap between the value of imports and exports.
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.