MUMBAI: India’s trade deficit, on a Balance of Payment basis, was lower at USD 30.7 billion in the third quarter of the fiscal year ending today as compared to USD 34.0 billion during Q3of 2008-09.

According to data released by RBI today, the country’s merchandise exports recorded a growth of 13.2 per cent in Q3 of2009-10 as against a decline of 8.4 per cent in Q3 of 2008-09.

Import payments, on a BoP basis, registered a growth of2.6 per cent in Q3 of 2009-10 as compared with an increase of 9.2per cent in Q3 of 2008-09, grew by 6.6 per cent on Directorate General of Commercial Intelligence and Statistics (DGCI&S) basis during the quarter under review. The low growth in imports is mainly attributed to decline in oil related import payments due to lower international crude oil prices during the period.

The decline in invisibles receipts, which started in the Q4 of2008-09, continued during Q3 of 2009-10. Invisibles receipts registered a decline of 3.1 per cent during the quarter (as against an increase of 5.4 per cent in Q3 of 2008-09) mainly on account of decline in business, communication and financial services, and investment income receipts. Although, software exports recorded a robust growth of 15.3 per cent, services exports as a whole witnessed a decline of 12.3 per cent during the quarter as against an increase of 11.8 per cent during the corresponding quarter of 2008-09.

Invisibles payments recorded a growth of 12.9 per cent during Q3of 2009-10, as compared with a low growth of 2.4 per cent in Q3 of2008-09, mainly led by increase in payments under almost all components of services. As decline in services exports was made up by strong private transfers receipts (24.1 per cent in Q3 of 2009-10), net invisibles (invisibles receipts minus invisibles payments) recorded a surplus of $18.7 billion in Q3 of 2009-10 ($ 22.4 billion in Q3 of 2008-09). Size of invisibles surplus in Q3 of 2009-10 was, however, lower than Q3 of preceding year. Therefore, despite low trade deficit, the current account deficit was higher at $12.0 billion in Q3 of 2009-10 ($11.7 billion in Q3 of 2008-09).

Continuing buoyancy in capital inflows mainly led by large inflows under foreign direct investments, portfolio investments and short-term trade credits resulted in a net capital account surplus of $14.7 billion during Q3 of 2009-10 as against a net deficit of $6.1 billion during Q3 of 2008-09.

Net FDI flows (net inward FDI minus net outward FDI) amounted to $ 3.9 billion in Q3 of 2009-10 ($$ 0.4 billion in Q3 of 2008-09). Net inward FDI stood at $7.1 billion during Q3 of 2009-10 ($6.3 billion in Q3 of 2008-09). Net outward FDI remained lower at $3.2 billion in Q3 of 2009-10 ($5.9 billion in Q3 of 2008-09 There was an increase in foreign exchange reserves on BoP basis (i.e. excluding valuation) of $1.8 billion in Q3 of 2009-10 as against a decline of $17.9 billion in Q3 of 2008-09. In nominal terms (including valuation changes), foreign exchange reserves rose by $2.2 billion during Q3 of 2009-10.