The Indian current account is in a deficit of about -13. Over the 20 years the current account has fluctuated significantly between deficit and surplus. In 2004, it reached its peak surplus at about $7.5 billion. It is currently in a deficit of about $13.7 billion. India is a leading exporter in jewelry, gems, leather and others, and it has good services therefore boosting the current account. In terms of GDP the deficit is 2.9%. Luckily, India has enough foreign reserves to counter this course. The government is likely to buy its own currency to so that it depreciates and exports will boost. India’s GDP is $1296 billion and the GDP growth rate is 8.80%.
In the article “India’s current account deficit may widen to a record: Goldman“, it is predicted that the deficit will increase from 2.9% to 4%. This is because of short-term capital inflows and not foreign direct investment. Furthermore, because the standard of living is increasing in India, the demand for imports is increasing and this could slow the exports down creating a bigger deficit as the expenditure on imports will be more than the revenue gained by exports. Luckily, India has enough foreign reserves to counter this course. The government is likely to sell its own currency so that it depreciates which in turn will boost exports. The deficit reached $13.7 billion in June whereas in 2009 it was merely $4.5 billion.