Current account deficit narrows in 2016-17: RBI

Mumbai: India`s current account deficit (CAD) narrowed during last fiscal due to a contraction in the country`s trade deficit.

According to data furnished by the Reserve Bank of India (RBI), the CAD for last fiscal narrowed to 0.7 per cent of the GDP from 1.1 per cent in 2015-16 on the back of the contraction in trade deficit.

The current account is the net difference between inflows and outflows of foreign currencies.

India`s trade deficit during the fiscal under review narrowed to $112.4 billion in 2016-17 from $130.1 billion in 2015-16.

"Net invisible receipts were lower, mainly due to moderation in both software exports and net private transfer receipts, and higher outgo on account of primary income (profit, interest and dividends)," the RBI said in a statement.

However, the data showed that net FDI (Foreign Direct Investment) inflows in 2016-17 marginally declined to $35.6 billion from $36 billion reported during 2015-16.