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Net foreign direct investment flows have remained robust, despite some recent moderation. Long term flows such as external commercial borrowings also remain stable. India’s foreign exchange reserves are sizeable with net forward assets providing a strong back-up. The external debt to GDP ratio remains low at 20 percent,” Das said.
India’s external sector has remained resilient amidst formidable global headwinds, RBI Governor Shaktikanta Das said on May 4, adding that the country’s merchandise exports remained strong in April 2022 and services exports reached a new high in March 2022.
According to Das, potential market opportunities have opened up due to geopolitical conditions and the recent trade agreements. Further, he believes that strong revenue guidance by major information technology (IT) companies also bodes well for the overall external sector outlook in 2022-23.
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The worsening of terms of trade, driven by higher commodity prices could have implications for the current account deficit in 2022-23, but it is expected to be comfortably financed, Das said
“Net foreign direct investment flows have remained robust, despite some recent moderation. Long term flows such as external commercial borrowings also remain stable. India’s foreign exchange reserves are sizeable with net forward assets providing a strong back-up. The external debt to GDP ratio remains low at 20 percent,” he added.