Current a/c deficit jumps on higher oil imports

India's current account deficit climbed in the first quarter of the current fiscal year as a widening trade gap, fueled by increased oil imports, offset higher net invisible surplus, the Reserve Bank of India (RBI) said. Current account deficit in the quarter ended June stood at US $ 10.7bn versus US $ 6.3bn in Q1 of 2007-08, data released by the central bank showed. The capital account had a surplus of US$12.96bn in the quarter ended June as against US$17.5bn in the same quarter a year earlier. As a result, the BoP surplus for the Apr-June quarter fell to US$2.2bn from US$11.2bn in the year-ago period.

Net FDI flows were higher at US$10.1bn in Q1 FY09 as against US$2.7bn in Q1 FY08. Portfolio investment witnessed large net outflows (US$4.2bn) in Q1 FY09 compared to net inflows of US$7.5bn in the same quarter last year. Net ECB inflows to India amounted to US$1.3bn in Q1 FY09 as against US$6.9bn in the corresponding quarter of last year. This constituted 11.8% of net capital flows as against 40.3% last year. Net accretion to foreign exchange reserves on a BoP basis (i.e., excluding valuation) was US$2.2bn in Q1 FY09 versus US$11.2bn in the first quarter last year.