India's current account deficit (CAD) at USD 3.4 billion (0.6 per cent of GDP) in Q4 of 2016-17 was higher than USD 0.3 billion (0.1 per cent of GDP) in Q4 of 2015-16 but narrowed from USD 8.0 billion (1.4 per cent of GDP) in the preceding quarter.

The widening of the CAD on a year-on-year (y-o-y) basis was primarily on account of a higher trade deficit (USD 29.7 billion) brought about by a larger increase in merchandise imports relative to exports.

Net services receipts increased on a y-o-y basis on the back of a rise in net earnings from travel, transport, construction and other business services.

Private transfer receipts, mainly representing remittances by Indians employed overseas, at USD 15.7 billion remained almost at the same level as in the preceding year.

In the financial account, net foreign direct investment at USD 5.0 billion in Q4 of 2016-17 moderated from its level a year ago.

Net portfolio investment, however, recorded substantial inflow of USD 10.8 billion in Q4 of 2016-17 in both equity and debt segment, as against net outflow of USD 1.5 billion in Q4 last year.

Net receipts on account of non-resident deposits amounted to USD 2.7 billion in Q4 of 2016-17, lower than US$ 4.4 billion a year ago.

In Q4 of 2016-17, there was an accretion of foreign exchange reserves (on BoP basis) to the tune of USD 7.3 billion as compared with an increase of USD 3.3 billion in Q4 of last year.