The Reserve Bank of India (RBI), said on Wednesday that India's current account balance stood in minor deficit of $0.3 billion. This is 0.1% of India's Gross Domestic Product (GDP) in April to June 2016 quarter (Q1FY17). 

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Net service receipts declined by 2% in Q1FY17 to 15.8%, from 17.8% in June 2015, due to a fall in net earnings on account of travel, financial services and other business services.

Net payment on account of primary income (dividend, interest and profit) increased marginally in Q1 of 2016-17 from its level a year ago. 

Meanwhile, private transfer receipts, representing remittances by Indians employed overseas, witnessed to $ 15.2 billion (Rs 96018.4 crore), declining from their level in the preceding quarter as well as from a year ago.

Although this Current Account Deficit (CAD) was significantly lower than $6.1 billion in the same quarter of last year, analysts and industry experts were expecting the country to post its first surplus in nearly nine years. 

A Reuters poll done earlier this month showed that economists expected a surplus of $4 billion, or 0.8% of GDP. 

Current Account Deficit (CAD), or the difference between inflow and outflow of foreign exchange, came in at 1.1% of GDP in 2015-16, 1.3% in 2014-15, 1.7% in 2013-14 and a record high of 4.8% of GDP in 2012-13.

In the April-June 2016 quarter, CAD contracted mainly due to lower trade deficit ($23.8 billion) than in Q1 of last year ($34.2 billion) and in the preceding quarter ($24.8 billion).

Current account deficit for India since 2006 - 2016: 

RBI data showed that merchandise imports in the given quarter declined sharply (by 11.5%) vis-à-vis merchandise exports (which declined by 2.1%, leading to a lower trade deficit in Q1 of 2016-17.

Lower trade deficit was expected as exports have shown signs of revival in the June quarter.  For the first time in 18-months, India's exports during June 2016 grew by 1.27% to $22,572.30 million (nearly Rs 1.50 lakh crore)  as against $22, 289.43 million (nearly Rs 1.48 lakh crore) in June 2015, showed the Ministry of Commerce and Industry data on July 15.  

Samir Tripathi of ICICI Global Markets said in research note dated July 18, said, "Lower trade deficit for Q1 increases the possibility of a current account surplus in Q1. This is likely to be the first current account surplus quarter since March 2007." 

Net foreign direct investment moderated to $4.1 billion (approx Rs 25,899.7 crore)  in Q1 of 2016-17 from $10 billion (Rs 63,170 crore)  in Q1 of 2015-16 and $8.8 billion (Rs 55,589.6 crore) in the preceding quarter i.e., Q4 of 2015-16.

On the other hand, portfolio investment, recorded a net inflow of $2.1 billion (Rs 13,265.7 crore) in Q1 of 2016-17 as against a marginal outflow in the corresponding period of last year and an outflow of $1.5 billion (Rs 9,475.5 crore)  in the preceding quarter, primarily reflecting net inflow in the equity component.

Non-resident Indian (NRI) deposits stood at $1.4 billion (Rs 8,843.8 crore) moderated in Q1 of 2016-17 from their level in Q1 last year as well as in the preceding quarter.

During this period, foreign exchange reserves (on a BoP basis) increased by $7 billion (Rs 44,219 crore)  in Q1 of 2016-17 as compared with an accretion of $11.4 billion (Rs 72,013.8 crore) in Q1 of 2015-16 and $3.3 billion (Rs 20,846.1 crore)  in the preceding quarter.