Sustainability Issues in India's Balance of Payments

The cover provided to the balance of payments all these years by invisible receipts and capital infl ows made the government lax about the widening merchandise trade defi cit. Now with the current account defi cit widening to dangerous levels, policy has shifted to wooing foreign capital at all costs and looking at options to control gold imports. The key to sustainability of the BOP lies in boosting manufactured exports and thereby containing the trade defi cit.