Still, it was wider than the USD 18.17 billion, or 3.6 percent of GDP, in the three months ending in March, on a seasonal slowdown in exports and firm imports. Five economists had predicted the June quarter current account deficit (CAD) would rise to USD 23- USD 25 billion.

However, economists expect the gap to ease in subsequent quarters as government steps to increase the import duty on gold have constricted imports of the metal, while improving global demand and a weaker Indian currency are expected to help exports.

India's balance of payments slipped marginally into deficit for the June quarter at USD 346 million versus a surplus of USD 2.68 billion in March quarter.

India's financial and capital account, which includes foreign direct investment, portfolio investment and overseas borrowing by Indian companies, was a surplus of USD 20.8 billion in the June quarter compared with a surplus of USD 17.8 billion in the March quarter.

India's high current account gap has made the country especially vulnerable to a surge in capital flows out of emerging markets in recent months, sending the rupee down as much as 20 percent this year to a record low on August 28, although it has since recovered some of that ground.

 (Agencies)

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