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The country's exports grew at a higher pace than imports during the third quarter.
Exports recorded a growth of 39.8 per cent, while imports registered a growth of 24.9 per cent, in the period October to December 2010, according to the Balance of Payment data released by the Reserve Bank of India.
In absolute terms, exports increased to $66 billion ($47.2 billon in October-December 2009), while imports increased to $97.5 billion ($78.1 billion).
The trade deficit (exports minus imports) in absolute terms increased slightly to $31.6 billion ($30.9 billion).
Current account deficit moderates
Despite higher trade deficit, current account deficit moderated to $9.7 billion in the third quarter, from $12.2 billion. The moderation is on account of strong recovery in invisibles surplus.
Invisibles receipts grew by 33.8 per cent, while invisibles payments grew by 48.2 per cent. Net invisibles (receipts minus payments) increased by 17 per cent, against a decline 19 per cent, to $21.9 billion.
Invisibles include travel, transportation, business, software and financial services.
However, for the period April-December 2010, the current account deficit widened to $38.9 billion ($25.5 billion). This was due to higher trade deficit at $102.1 billion ($86.8 billion). At this level, current account deficit works out to 3.1 per cent of GDP during April-December 2010.
Capital flows
Within capital flows, portfolio investment increased to $30.1 billion for the April-December 2010 period ($23.6 billion).
Short-term trade credits increased to $8.5 billion ($3.1 billion). NRI deposits fell to $2.3 billion during the April-December period ($3.5 billion).
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