Current account surplus likely for India's Q4-FY15

India likely to post a current account surplus of USD 6.8bn in Q4-FY15 (January-March 2015), the first since March 2007. Lower oil prices and still-sluggish domestic growth are the likely reasons for this.

While a much wider-than-expected March trade deficit poses downside risk to Standard Chartered's forecast, it is unlikely to change the dynamics significantly. Given substantial capital inflows, Standard Chartered expects a Q4-FY15 balance-of-payments surplus of more than USD 20bn. 

A USD 19bn balance-of-payments surplus was last seen in December 2013 after India launched concessional swap schemes during September-November that year. This is likely to result in a FY15 balance-of-payments surplus of more than USD 50bn and a current account deficit of 0.9% of GDP.