Indian diaspora deposits boost capital account to $33.5 billion surplus in July, RBI data shows

Kolkata: A net $33.5 billion accumulation of overseas deposits from the Indian diaspora helped the country's capital account log a massive surplus In July, also leading to positive balance of payments offsetting the current account deficit for the month, data published by the Reserve Bank of India showed.

The capital account in July stood at a surplus of $27.7 billion. For the first four months, it was also a surplus of $23.9 billion, reversing the first quarter deficit as the RBI's dedicated dollar-mobilisation programme exceeded all expectations.

The four months surplus widened as compared with $11.4 billion in in the year ago-period.


The balance of payments for the fourth month of the fiscal was at $20.8 billion as against a deficit of $8.1 billion for the April-June period, the latest set of data showed. For the four months period, the surplus widened to $12.7 billion against $4.8 billion in the comparable period a year prior.

India's capital account in July was also buoyed by a net $7.3 billion foreign direct investment inflows. Portfolio investment flows to the country's capital market also turned positive at 4.1 billion. There was however a net outflow of $2.3 billion in the month under review in terms of external commercial borrowings.

The country's current account, which records the net flows arising out of international trade and financial transfers, remained in deficit at $7 billion in July, taking the total deficit for the fiscal so far at $11.2 billion. This was largely on account of merchandise trade deficit at $31.7 billion in July, while there were positive flows from services and net transfers on net basis.

The merchandise trade deficit rose to $117.8 billion for the first four months of the fiscal, as compared with $97.1 billion a year ago.