Talking about the current state of India's current account deficit for the last quarter of January-March 2023-24, the RBI Governor stated that the deficit is expected to have moderated from an easing trade deficit, a strong bulge in services exports, and large remittances. He said India's foreign exchange reserves rose to an all-time high of $ 651.5 billion as on May 31, reflecting the robust nature of the external sector in the country. Das said that the country was expected to well meet its financing needs abroad. He also said that India has had a robust global position as the largest recipient of remittances, a position projected to have a share of 15.2% of the world remittances in 2024.
In this context, he brought out that software exports, other business services, and travel comprised the lion's share of these services exports and had shown significant growth. In this context, the Governor attributed this in part to the rise in GCCs, or global capability centres, in India, which have significantly increased India's exports of software and business services.
Foreign Portfolio Investment surged to US$ 41.6 billion in net inflows in 2023-24. Foreign portfolio flows increased by US$ 41.6 billion to touch an all-time high of US$ 610 billion, as per the recently available information. He, however, pointed out that since the beginning of 2024-25, foreign portfolio investors have become net sellers in the domestic market, with net outflows totaling US$ 5.0 billion as of June 5.
India retained its position as the most favored destination for greenfield FDI inflows in the Asia-Pacific region in 2023. Gross FDI continued to be robust in 2023-24, but net FDI moderated. On the other hand, net inflows through ECBs and NRDs were higher than a year ago, even as there was a surge in the number of ECB agreements during the period.
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