ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Is the Comfort in the External Sector Tenuous?

India's international investment position shows her net external liabilities in the red and on occasion these have grown. That a large proportion of capital inflows are of the "non-debt" variety is no comfort, for much of these inflows - mainly portfolio capital - is extremely volatile. The large foreign exchange reserves have been built not with current account surpluses but with capital receipts, which are a potential source of future trouble and have already put pressure on the rupee and affected exports.

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