Services Trade Surplus and Strong Forex to Secure India's Current Account: Crisil

Synopsis
Key Takeaways
- Services trade surplus of $18 billion in January.
- Current account deficit projected at 1% of GDP for fiscal 2025.
- Service exports increased to $354.90 billion during April-February.
- Overall exports grew by 6.24% in the same period.
- Foreign exchange reserves rose by $15.267 billion.
New Delhi, March 19 (NationPress) The surplus in services trade and the strong inflow of remittances in India act as a protective factor, ensuring that the current account remains within a secure range, according to a recent report by Crisil.
"We anticipate the current account deficit to reach 1 percent of the gross domestic product for fiscal 2025 and 1.3 percent for fiscal 2026," the report stated.
The projected value of service exports from April to February in the ongoing fiscal year stood at $354.90 billion, an increase from $311.05 billion in the same timeframe of 2023-24.
Service exports witnessed a 12 percent year-on-year increase in January, while the growth of service imports slowed to 12.6 percent from 13.8 percent.
As a result, the services trade surplus amounted to $18 billion in January, compared to $16.2 billion the previous year, although it was slightly lower than $19.1 billion in December.
India's total exports of both goods and services reflected a 6.24 percent growth during April-February 2024-25, reaching $750.53 billion, in contrast to $706.43 billion in the same period the previous year, based on data from the Ministry of Commerce and Industry.
The overall value of merchandise exports during April-February 2024-25 reached $395.63 billion, compared to $395.38 billion in the same period last year, marking a growth of 0.06 percent.
The estimated value of service imports during this 11-month timeframe is $183.21 billion, up from $161.71 billion during the same period the previous year.
The services trade surplus for April-February 2024-25 totals $171.69 billion, compared to $149.34 billion in the same timeframe last year, as indicated by the data.
Additionally, India's foreign exchange reserves recorded their most significant weekly increase in over three years during the week ending March 7, with the Reserve Bank of India (RBI) reporting a rise of $15.267 billion to $653.966 billion.