New Delhi, Jul 4 : India’s Current Account Deficit (CAD) has increased from 1.9 per cent of GDP in 2017-18 to 2.6 per cent in April-December 2018 owing to a higher trade deficit driven by rise in international crude oil prices (Indian basket), the Government announced on Thursday.
Union Finance and Corporate Affairs Minister Nirmala Sitharaman tabled the Economic Survey 2018-19 in Parliament.
According to the survey, the trade deficit increased from 162.1 billion dollars in 2017-18 to 184 billion dollars 2018-19.
Merchandise imports reduced from 21.1 per cent to 10.4 per cent. Growth in service exports and imports in US dollar terms declined to 5.5 per cent and 6.7 per cent respectively in 2018-19, from 18.8 per cent and 22.6 per cent respectively in 2017-18, the survey said.
The foreign exchange reserves in nominal terms also decreased by 11.6 billion dollars end-March 2019 over end-March 2018. Within the year, foreign exchange reserves were declining until October 2018 due to RBI’s intervention to modulate exchange rate volatility.
The Survey said India’s foreign exchange reserves continued to be comfortably placed at 422.2 billion dollars, as on June 14, 2019.
Net Foreign Direct Investment (FDI) inflows also grew by 14.2 per cent in 2018-19. Among the top sectors attracting FDI equity inflows, services, automobiles and chemicals were the major categories.
The survey added that FDI inflows have been growing at a high rate since 2015-16, indicating improvement in confidence of the foreign investors in the Indian economy.