There isn’t any need for “exaggerated concern” about India’s external account state of affairs, Chief Economic Advisor V. Anantha Nageswaran asserted on Tuesday, whereas stressing that the Economic Survey’s forecast of 6.5% development for 2023-24 was properly inside the vary of these estimated by different companies though draw back dangers dominated the upside potential.
“India’s merchandise trade deficit, which was running at $30 billion around the third calendar quarter of 2022 has been steadily shrinking, which obviously relieves the pressure on the external account,” the CEA mentioned including that companies exports had been doing properly too.
“Overall FDI flows in the current financial year until about the third quarter, based on the RBI monthly bulletin, we do see it is just a tad lower than what it was on a net basis compared to the previous financial year. But overall, we might end up with a number that is closer to somewhere between $40 and $45 billion of net FDI flows,” he identified.
“Forex reserves after having dipped all the way through October, picked up again and because of the slight withdrawal of portfolio flows in January and February, have shown a slight decline in the last few weeks. Nonetheless, whatever concerns people have with respect to India’s external situation at the moment seems somewhat unnecessary. It is something that we need to keep a lookout for, but there is no need for exaggerated concern given the number of months of import cover we have..” Mr. Nageswaran concluded.
Allaying considerations about the dip in imports in current months as an indication of potential cooling of home demand, Mr. Nageswaran mentioned the import invoice had been declining due to the truth that crude oil costs had moderated fairly a bit.
