India’s current account moved into surplus for the first time in four quarters and was pegged at $2.56 billion during the fourth quarter of 2006-07.
The Reserve Bank of India (RBI), which released the data on Friday, said the surplus was mainly due to the buoyant growth in invisibles, led by exports of software services (29.9 per cent), travel receipts (19.5 per cent) and private transfers (19.1 per cent) during the fourth quarter of 2006-07. The current account was in a deficit of $2.78 billion in the third quarter of 2006-07.
“Invisible receipts showed steady growth in the fourth quarter of 2006-07 while payments recorded moderate growth. Steady expansion in invisibles reflected mainly the growth in exports of commercial services such as software, professional services, travel and inward remittances,” the RBI said.
India's balance of payments more than doubled to $36.6 billion in the year through March from a year earlier.
During 2006-07, net foreign direct investment into India accelerated on the strength of sustained domestic activity and a positive investment climate. “Foreign direct investment was channelled mainly into financial services, manufacturing, banking services, information technology and construction,” the RBI said.
Outward investment from India also showed a significant increase due to the big appetite of Indian companies for global expansion, reflected in some large overseas acquisitions, it said.
External commercial borrowings by Indian corporate entities increased to $16 billion from $2.7 billion a year ago as companies found easier and cheaper access to overseas capital to fund their expansion.
On a balance of payment (BoP) basis, India’s merchandise exports posted growth of 11.4 per cent during the quarter ended March 2007. Import payments, on a BoP basis, recorded 16.4 per cent growth during the quarter.
While oil import growth significantly decelerated to 7.6 per cent in the quarter ended March 2006-07, non-oil imports recorded strong growth of 29.2 per cent.
India’s external debt grew by $28.6 billion to $155 billion during 2006-07, primarily due to a 59 per cent increase in overseas borrowings by companies.