India's current account deficit rises as gold imports soar

The current account deficit widened to $10.1 billion or 2.1 per cent of GDP for the September quarter as against 1.2 per cent in the year-ago period due to higher trade deficit, the Reserve Bank said on Monday.

The current account deficit (CAD) is the net difference between inflows and outflows of foreign currencies.

"The increase in CAD was primarily on account of higher trade deficit contributed by both a deceleration in export growth and increase in imports," the RBI said.

Merchandise exports growth dipped 4.9 per cent in the second quarter, while there was an 8.1 per cent surge in imports on higher inbound gold shipments.

For the first six months of 2014-15, the current account gap narrowed to 1.9 per cent or $17.9 billion from 3.1 per cent in the same period a year-ago, the RBI data showed.

There was a net accretion of $ 6.9 billion to the forex reserves during the reporting quarter as against a drawdown of $ 10.4 billion.

Net inflows of NRI deposits at $4.1 billion in Q2 were lower than the $8.2 billion notched up during the days of rupee fall in the year ago period, the RBI said. External commercial borrowings by enterprises at $ 1.4 billion in were higher than $1.3 billion year-on-year.

CAD 1.2 per cent in the second quarter of the previous fiscal on unconventional moves to arrest the rupee slide.

It stood at 1.7 per cent for the preceding June quarter this year. On services, the net services improved by 3.4 per cent on a pick-up in telecommunications, computer and information services, the RBI said.