Current Health

India's current account deficit (CAD) remains a key indicator of the country's economic health, influenced by global trade dynamics and domestic policy shifts.

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Data for the July-September quarter reveals a modest narrowing of the CAD to 1.2 per cent of GDP, down from 1.3 per cent a year ago, despite ongoing challenges like a widening merchandise trade deficit and weaker global demand. The slight reduction in the CAD is a positive development, but it's important to understand the underlying factors. The major contributor to this improvement has been the strength of India's services exports. With net services receipts rising to $44.5 billion, India's services sector continues to provide a buffer against the goods trade deficit. This growth, particularly in IT services, business services, and transportation, underscores India's competitive edge in these areas and highlights the importance of services in the country's economic structure. The services sector remains a critical pillar supporting India's foreign exchange reserves, helping cushion against external economic shocks