In the December 2016 quarter, The Current account deficit (CAD) of the country increased even when the trade deficit was lower. Because of a slowdown in the international market and due to demonetization and deposits by non-resident and global Indians fell down this increase in CAD was seen because the services exports also dipped down.
In end of the December quarter, the capital flows also slowed and the net balance of payments saw a moderate deficit of $ 1.2 billion. In the December quarter, CAD expanded to $ 7.9 billion whereas in the same quarter of the previous year, it was $ 7.1 billion (the excess of imports of goods and services over exports in its external sector balance sheet is known as CAD).
In comparison with the same quarter of 2016-17 to October-December 2015-16, the trade deficit saw a moderate decrease from $34 billion to $ 33.3 billion.
Due to the strengthening of global oil prices, Crude imports from the country increased by about $1.7 billion (YoY). A from the previous year, remittances from Indians abroad has reduced3.8% and in the July-¬September 2015 quarter reached to $ 17.7 billion from $18.2 billion as per RBI. In comparison to last year, in the third quarter of current fiscal Net foreign direct investment is at $ 9.8 billion which is lower.