The Hindu Business Line : NRI remittances stay buoyant

Mumbai, Dec. 31 The private transfers, comprising primarily remittances from NRIs, nearly doubled at $10.08 billion for the July–September 2007 quarter, against $5.37 billion in the same period last year as per the Balance of Payment figures released by the Reserve Bank of India on Monday.

For the last two quarters, remittances from overseas Indians have been increasing. In the first quarter of this fiscal, i.e. April-June 2007, private remittances were at $8.34 billion. The latest increase thus sustains the trend of buoyancy in such inflows witnessed for some time now (See Table). This has, however, not been enough to dent the ‘current account deficit’ (the gap between foreign exchange inflows and outflows on revenue account) that saw the figure touch $5.5 billion in the latest quarter.

Trade deficit widens

Exports grew by 19 per cent (27.4 per cent) . This has led to the trade deficit widening to $21.7 billion ( $16.7 billion).

Exports slowed down due to a decline in exports of textiles, textile products, agricultural products, engineering goods and chemicals. In the second quarter 2007-08, exports were at $37.8 billion ( $31.836 billion) . Imports were at $59.5 billion ( $48.5 billion).

Non-oil imports were higher by 25.3 per cent (18.1 per cent last year), led by imports of capital goods and gold and silver. However, the total import growth was lower due to deceleration in oil imports.

Growth in remittances from overseas Indians, software services and other professional services, which make up invisible receipts, recorded a growth of 29.1 per cent, almost the same as 30.6 per cent last year.

The net inflow to the capital account, (excluding valuation) was $29.23 billion. Portfolio inflows from foreign institutional investors continued to remain robust. They registered $10.9 billion in the September quarter compared to a mere $ 2.1 billion in the same period last year.

For the half-year period April-September 2007, non-oil imports recorded a higher growth of 34.8 per cent (9.3 per cent). Oil imports increased by 15.7 per cent in the first half (41.0 per cent).

Growth in invisible receipts showed a deceleration to 23.4 per cent (31 per cent) mainly on account of deceleration in exports of software and business services.

Software receipts at $16.3 billion showed a lower growth of 15.2 per cent than that of 37.2 per cent. Invisible payments grew by 13 per cent against 31.2 per cent last year.