India’s BoP at Capital Account

As we studied above, the BoP in India has been classified into

  • BoP at current account
  • BoP at Capital Account

India’s BoP at Capital Account

Under capital account, capital inflows can be classified by instrument (debt or equity) and maturity (short or long-term). The main components of capital account include foreign investment, loans and banking capital. Foreign investment comprising foreign direct investment (FDI) and portfolio investment consisting of foreign institutional investors (FIIs) investment, American Depository Receipts / Global Depository Receipts (ADRs / GDRs) represents non-debt liabilities, while loans (external assistance, external commercial borrowings and trade credit) and banking capital including non-resident Indian (NRI) deposits are debt liabilities.

The following chart shows India’s BoP on Capital account:


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