India’s Balance of Payments (BoP) witnessed a significant boost in the second quarter of FY25, driven by robust inflows from Non-Resident Indian (NRI) deposits, External Commercial Borrowings (ECBs), and Foreign Portfolio Investments (FPIs), according to a report by the Bank of Baroda.
The report highlighted a sharp rise in the capital account surplus, which climbed to $11.9 billion in Q2 FY25, compared to $10.3 billion in the same quarter last fiscal year. The BoP registered an accretion of $18.6 billion this quarter, a substantial increase from $2.5 billion in Q2 FY24.
While Foreign Direct Investment (FDI) outflows rose to $2.2 billion this quarter from $0.8 billion in the corresponding period last year, other key components of the capital account recorded remarkable growth.
FPI inflows surged to $19.9 billion in Q2 FY25, a fourfold increase from $4.9 billion in the same period the previous year. Similarly, NRI deposit inflows more than doubled to $6.2 billion, up from $3.2 billion in Q2 FY24. ECBs also demonstrated a strong recovery, recording net inflows of $5 billion, reversing the $1.9 billion net outflows seen in Q2 FY24.
The report attributed these trends to favorable global financial conditions and improved investor confidence, which have bolstered India’s external position despite ongoing challenges in the current account deficit and trade balance.
(Inputs from ANI)
