The surplus in the current account in Q1 of 2020-21 was on account of a sharp contraction in the trade deficit to US$ 10.0 billion due to steeper decline in merchandise imports relative to exports on a year-on-year basis.
Net services receipts remained stable, primarily on the back of net earnings from computer services.
Private transfer receipts, mainly representing remittances by Indians employed overseas, amounted to US$ 18.2 billion, a decline of 8.7 per cent from their level a year ago.
Net outgo from the primary income account, primarily reflecting net overseas investment income payments, increased to US$ 7.7 billion from US$ 6.3 billion a year ago.
In the financial account, net foreign direct investment recorded outflow of US$ 0.4 billion as against inflows of US$ 14.0 billion in Q1 of 2019-20. Net foreign portfolio investment was US$ 0.6 billion as compared with US$ 4.8 billion in Q1 of 2019-20 as net purchases in the equity market were offset by net sales in the debt segment.
With repayments exceeding fresh disbursals, external commercial borrowings to India recorded net outflow of US$ 1.1 billion in Q1 of 2020-21 as against an inflow of US$ 6.0 billion a year ago. Net inflow on account of non-resident deposits increased to US$ 3.0 billion from US$ 2.8 billion in Q1 of 2019-20. There was an accretion of US$ 19.8 billion to the foreign exchange reserves (on a BoP basis) as compared with that of US$ 14.0 billion in Q1 of 2019-20, RBI said.