India's current account deficit widened to $6.1 billion and the trade deficit increased to $18.5 billion even as exports surged by 17 per cent in the first quarter of the current fiscal.
The latest data provided by the Reserve Bank of India said that the large trade deficit led to a higher current account deficit of $6.1 billion as against $3.6 billion in the corresponding quarter last year.
With import growth outstripping that of exports, the trade deficit had widened to $18.5 billion as against $13.6 billion in the first quarter of FY 07, the apex bank stated.
While the country's exports posted a growth of 17 per cent in the first quarter as against 35.4 per cent in the corresponding quarter, the imports moderated but remained higher than exports at 23.8 per cent as against 64.5 per cent in the first quarter of 2005-06, largely due to the rising crude oil prices.
The average price of the Indian basket of international crude, a mix of Dubai and Brent varieties, surged to $66.8 per barrel in the first quarter from a low of $49.3 per barrel in the corresponding quarter of last year, the RBI data stated.
Further, as per the data released by Directorate General of Commercial Intelligence and Statistics (DGCI&S) while the growth in oil imports moved from 31 per cent in April-June 2005 to 44.9 per cent in April-June 2006, non-oil imports witnessed a deceleration of 9.1 per cent as against an increase of 52.9 per cent over the corresponding period of the previous year.
Non-oil imports, excluding gold and silver during the quarter recorded an increase of 17.3 per cent as against 53 per cent in the corresponding period of the previous year.
The capital account witnessed a higher net capital flow with a steady growth in net inflow under external commercial borrowings (ECBs), foreign director investment (FDI) and banking capital.
The FDI in the country during the quarter stood at $1.727 billion while the ECB and banking capital stood at $3.560 billion and $5.079 billion, respectively, the RBI data stated.
The increase in banking capital was on account of higher inflow under NRI deposits and drawdown of foreign assets of commercial banks, the apex bank stated.
Maintaining the pace of growth in travel earnings, business and professional services, software services and remittances, invisible receipts rose by 22.6 per cent.
Meanwhile, indicating the pace of outbound tourist traffic and rising travel spending, the invisible payments grew at 21.9 per cent. Software exports were recorded at $6.4 billion in the first quarter of 2006-07 as compared with $5.1 billion in the corresponding quarter of the previous year.
The miscellaneous receipts, net of software, were recorded at $6.4 billion in first quarter of 2006-07 as against $4.6 billion in the corresponding quarter of last year.
Receipts on account of business services increased to $4.5 billion in the quarter as against $1.9 billion in the corresponding quarter of FY 07.
Accretion to foreign exchange reserves at $6.4 billion was higher than $1.2 billion recorded during the corresponding quarter of the previous year.
Taking into account the valuation gain of $4.9 billion, foreign exchange reserves recorded an increase of $11.3 billion during April-June 2006 as against a decline of $3.1 billion during the corresponding period of the previous year.
