Balance of Payments (BOP)
📊 High-Yield Data & Statistical Fact Sheet
| BOP Sustainability Ceiling | - Current Account Deficit (CAD) safety benchmark is 2.5% to 3.0% of GDP. |
| Current Account Convertibility | - Full Convertibility (since 1994, Art VIII IMF). |
| Capital Account Convertibility | - Partial Convertibility. |
| FDI Threshold | - Holding $\ge 10\%$ equity in a listed company or any equity in an unlisted firm. |
| FPI Threshold | - Holding $< 10\%$ equity in a listed company. |
| External Debt-to-GDP Ratio | - Stable at ~20% of GDP. |
| External Debt Primary Component | - External Commercial Borrowings (ECBs) constitute the largest share. |
| External Debt Currency Composition | - US Dollar-denominated debt largest (~54%), followed by Indian Rupee (~31%). |
| IMF SDR Basket (5 Currencies) | - USD, EUR, RMB (Chinese Renminbi), JPY, GBP. |
1. THE ARCHITECTURE OF CURRENT & CAPITAL ACCOUNTS
| FDI Prohibited Sectors | - Atomic Energy, Railway Operations, Gambling/Casinos, Lotteries, Chit Funds, Nidhi Companies, Tobacco manufacturing. |
| FCNR(B) Account | - Maintained in foreign currency; interest earned is completely tax-free in India. |
| NRE Account | - Maintained in Indian Rupees; fully repatriable and interest earned is tax-free. |
| NRO Account | - Maintained in Indian Rupees for domestic earnings (rent, pension); interest earned is subject to tax. |
2. EXCHANGE RATE METRICS & CENTRAL BANK INTERVENTION
| NEER (Nominal Effective Exchange Rate) | - Weighted average of bilateral exchange rates. |
| REER (Real Effective Exchange Rate) | - NEER adjusted for inflation differentials. REER > 100 denotes overvaluation. |
| Managed Float System | - India follows a Managed Float (Dirty Float) exchange rate system where RBI intervenes via spot/forward transactions to curb excessive volatility without targeting a specific exchange rate level. |