Current account deficit

The gap between what a country earns from the rest of the world and what it pays out, covering trade in goods and services plus income and transfers.

A deficit of ₹6.4 lakh crore on ₹320 lakh crore of output is 2% of the economy.

India runs a structural goods deficit, driven by oil and gold imports, partly offset by services exports and by remittances. That composition is why the Indian current account is sensitive to the oil price in a way that most economies are not.

A deficit has to be financed by capital inflows, so a widening deficit at a time when foreign investors are withdrawing puts pressure on the currency.

Two per cent has historically been treated as a comfortable level and four as a warning.