India's current account deficit has widened in the quarter ended March on account of a higher trade deficit and a surge in gold imports.

In the January-March quarter, the current account deficit stood at $8.1 billion, or 1% of GDP, compared to a surplus of $0.6 billion, or 0.1% of the GDP, data released by the Reserve Bank of India (RBI) showed.

The current account balance swung into the surplus territory on the back of a sharp contraction in the trade deficit to $102.2 billion from $157.5 billion in 2019-20, RBI said.

The net foreign direct investment inflows at $44 billion were higher in FY21 than the $43.0 billion in 2019-20, the central bank added.

Net foreign portfolio investments also increased by $36.1 billion in FY21 as against $1.4 billion a year ago.

"A normalisation in import demand as well as a surge in gold imports contributed to the widening of the current account deficit," said ICRA chief economist Aditi Nayar.

India's deficit in goods trade had widened to $6.28 billion in May from $3.15 billion a year ago.

Net external commercial borrowing fell to $6.1 billion in the March quarter compared with $9.4 billion a year ago. However, portfolio investments increased by $7.3 billion versus a decline of $13.7 billion.

For the full fiscal year ended 31 March 2021, India posted a current account surplus of 0.9% of GDP versus a deficit of 0.9% of GDP in 2019/20.