Economic Survey 2020 Volume 2 – Chapter 3 (External Sector)

Table of Contents

INTRODUCTION

India’s external sector gained further stability in the first half of 2019-20, witnessing improvement in Balance of Payments (BoP) India’s foreign reserves are comfortably placed at US$ 461.2 billion as on 10th January, 2020.

India’s BoP position improved from US$ 412.9 bn of forex reserves in end March, 2019 to US$ 433.7 bn in end September, 2019.
Current account deficit (CAD) narrowed from 1% in 2018-19 to 1.5% of GDP in H1 of 2019- 20.
Foreign reserves stood at US$ 461.2 bn as on 10th January, 2020.

In sync with an estimated 2.9% growth in global output in 2019, global trade is estimated to grow at 1.0% after having peaked in 2017 at 5.7%.
However, it is projected to recover to 2.9% in 2020 with recovery in global economic activity.
India’s merchandise trade balance improved from 2009-14 to 2014-19, although most of the improvement in the latter period was due to more than 50% decline in crude prices in 2016-17.
India’s top five trading partners continue to be USA, China, UAE, Saudi Arabia and Hong Kong.

Net remittances from Indians employed overseas has been constantly increasing year after year and has continued doing so with the amount received in H1 of 2019-20 being more than fifty per cent of the previous year level.

Net FDI inflows have continued to be buoyant in 2019-20 attracting US$ 24.4 billion in the first eight months, higher than the corresponding period of 2018-19.
Net FPI in the first eight months of 2019-20 stood at US$ 12.6 billion.