<p>Rising exports and moderation in gold imports have pulled down India’s current account deficit (CAD) sharply to $4.2 billion, or 0.9 per cent of GDP, in December quarter of 2013-14.<br /><br /></p>.<p>“The lower CAD was primarily on account of a decline in the trade deficit as merchandise exports picked up and imports moderated, particularly gold imports,” the Reserve Bank said while releasing the external sector data.<br /><br />The CAD, which reflects difference between inflow and outflow of foreign currency, stood at $31.9 billion, or 6.5 per cent of GDP, in October-December quarter of 2012-13.<br /><br />It narrowed to $31.1 billion (2.3 per cent of GDP) in April-December 2013 from $69.8 billion (5.2 per cent of GDP) in April-December of 2012.<br /><br />The reduction, RBI said, was due to contraction in the trade deficit, coupled with a rise in net invisible receipts.<br /><br />In his interim budget speech, Finance Minister P Chidambaram had said the year-end CAD will be contained at $45 billion, well below the record high level of $88 billion in 2012-13.<br /><br />High gold imports was one of the major reasons for the record CAD. <br /><br />Earlier in the day, Chidambaram said government would revisit the import duty on gold only after factoring in the year-end CAD data.<br /><br />The Balance of Payments (BoP) during October-December 2013 period released by the RBI revealed that merchandise exports increased by 7.5 per cent to $79.8 billion in Q3 of 2013-14. This was on the back of significant growth especially in the exports of engineering goods, readymade garments, iron ore, marine products and chemicals.<br /><br />Merchandise imports at $112.9 billion, recorded a decline of 14.8 per cent in Q3 of 2013-14 as against an increase of 10.4 per cent in Q3 of 2012-13.</p>
<p>Rising exports and moderation in gold imports have pulled down India’s current account deficit (CAD) sharply to $4.2 billion, or 0.9 per cent of GDP, in December quarter of 2013-14.<br /><br /></p>.<p>“The lower CAD was primarily on account of a decline in the trade deficit as merchandise exports picked up and imports moderated, particularly gold imports,” the Reserve Bank said while releasing the external sector data.<br /><br />The CAD, which reflects difference between inflow and outflow of foreign currency, stood at $31.9 billion, or 6.5 per cent of GDP, in October-December quarter of 2012-13.<br /><br />It narrowed to $31.1 billion (2.3 per cent of GDP) in April-December 2013 from $69.8 billion (5.2 per cent of GDP) in April-December of 2012.<br /><br />The reduction, RBI said, was due to contraction in the trade deficit, coupled with a rise in net invisible receipts.<br /><br />In his interim budget speech, Finance Minister P Chidambaram had said the year-end CAD will be contained at $45 billion, well below the record high level of $88 billion in 2012-13.<br /><br />High gold imports was one of the major reasons for the record CAD. <br /><br />Earlier in the day, Chidambaram said government would revisit the import duty on gold only after factoring in the year-end CAD data.<br /><br />The Balance of Payments (BoP) during October-December 2013 period released by the RBI revealed that merchandise exports increased by 7.5 per cent to $79.8 billion in Q3 of 2013-14. This was on the back of significant growth especially in the exports of engineering goods, readymade garments, iron ore, marine products and chemicals.<br /><br />Merchandise imports at $112.9 billion, recorded a decline of 14.8 per cent in Q3 of 2013-14 as against an increase of 10.4 per cent in Q3 of 2012-13.</p>