India's current account deficit (CAD) narrowed to $14.3 billion, or 2 per cent of gross domestic product (GDP) in the June quarter (Q1), from $15.8 billion, or 2.3 per cent a year ago, according to official data released on Monday.
The CAD, which is the net of foreign exchange inflows and outflows, had stood at $4.6 billion, or 0.7 per cent, in March quarter.
"The CAD eased on a year-on-year (y-o-y) basis, mainly on account of higher invisible receipts at $ 31.9 billion as compared with $ 29.9 billion a year ago," the Reserve Bank of India said in a statement.
In Q1 of FY20, net services receipts increased by 7.3 per cent on a y-o-y basis, driven by spurt in net earnings from travel, financial services and telecommunications, computer and information services, RBI data showed.
Private transfer receipts, mainly representing remittances by Indians employed overseas, rose to $19.9 billion, increasing by 6.2 per cent from their level a year ago.
In the financial account, net foreign direct investment was $ 13.9 billion in Q1FY20, as against $9.6 billion in Q1 of FY19.
Foreign portfolio investment (FPIs) remained net seller as they pulled out a net sum of $3.3 billion from the Indian capital markets in April-June period. FPIs withdrew a net amount of $8.1 billion from debt and equity markets and infused $4.8 billion into the market.
Net inflow on account of external commercial borrowings to India stood at $6.3 billion in Q1FY20 versus an outflow of $1.5 billion a year ago. In Q1 of FY20, there was an accretion of $14 billion to the foreign exchange reserves as against a depletion of $11.3 billion in Q1FY19.
Edited by Chitranjan Kumar