In the preceding quarter, the current account had recorded a deficit of $2.4 billion, or 0.2% of GDP.
The merchandise trade deficit narrowed at $87.4 billion versus $88.5 billion a year ago, while net services receipts rose to $50.9 billion from $44.5 billion, driven by computer and business services.
Personal transfers, mainly remittances from overseas Indians, climbed to $38.2 billion from $34.4 billion. However, net outgo on the primary income account widened to $12.2 billion from $9.2 billion.
On the capital side, foreign direct investment posted a net inflow of $2.9 billion compared with an outflow of $2.8 billion a year earlier. Foreign portfolio flows swung to a $5.7 billion outflow from a $19.9 billion inflow, while external commercial borrowings slowed to $1.6 billion from $5 billion. Non-resident deposits fell to $2.5 billion from $6.2 billion.
Foreign exchange reserves declined by $10.9 billion on a balance of payments basis, reversing an accretion of $18.6 billion in the same quarter last year.
For the first half of the fiscal year, the current account deficit narrowed to $15 billion (0.8% of GDP) from $25.3 billion a year ago, while reserves fell by $6.4 billion compared with a $23.8 billion increase.