India recorded a current account surplus of $0.6 billion, or 0.1% of GDP, for the January-March period as against a deficit of $4.6 billion (0.7 per% of GDP) in the year-ago period. According to the data released by the RBI lower trade deficit was one of the prime reasons for the improvement in the current account balance. A fall in crude import bill because of lower demand and falling prices lead to an improved trade deficit at $35 billion and a sharp rise in net invisible receipts at $35.6 billion as compared with the corresponding period of last year.
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Strong inflows by way to remittances and FDI boosted the dollar receipts. Private transfer receipts, mainly representing remittances by Indians employed overseas, increased 14.8 per cent to $20.6 billion for the reporting quarter. The net foreign direct investment nearly doubled to $12 billion for the March quarter as against the $6.4 billion in the year-ago period.
For the full fiscal year 2019-20, the current account deficit narrowed to 0.9 per cent of the GDP compared to 2.1 per cent in financial year 2018-19.