The surplus in services trade and robust flow of remittances in India provide a cushion and should keep the current account in the safe zone, a new Crisil report has said. “We project current account deficit at 1 per cent of the gross domestic product in fiscal 2025 and 1.3 per cent in fiscal 2026,” the report mentioned.
The estimated value of service exports during April-February of the current financial year was $354.90 billion, up from $311.05 billion in the same period of 2023-24. Services exports grew 12 per cent on-year in January, whereas services import growth moderated to 12.6 per cent from 13.8 per cent.
Consequently, services trade surplus was $18 billion in January compared with $16.2 billion in the year-ago period but mildly lower than $19.1 billion in December.
India’s cumulative exports of both merchandise and services registered a 6.24 per cent increase during April-February 2024-25 to $750.53 billion, compared to $706.43 billion in the same period of the previous year, according to data released by the Ministry of Commerce and Industry.
The cumulative value of merchandise exports during April-February 2024-25 was $395.63 billion, as compared to $395.38 billion during the same period of the previous year, registering a growth of 0.06 per cent.
The estimated value of service imports during this 11-month period is $183.21 billion compared to $161.71 billion in the same period of the previous year. The services trade surplus for April-February 2024-25 works out to $171.69 billion as compared to $149.34 billion in the same period last year, the data showed.
Meanwhile, India’s foreign exchange reserves had their highest weekly gains in over three years in the week ending March 7. The Reserve Bank of India (RBI) data showed foreign exchange reserves rose by $15.267 billion to $653.966 billion.