Capital Outflows Cast Shadow On India’s Economic Outlook

Capital Outflows Cast Shadow On India’s Economic Outlook

India’s external sector remains resilient on the surface, supported by strong foreign exchange reserves of nearly $710 billion, according to the Reserve Bank of India. These reserves provide a solid buffer against any immediate balance of payments crisis, even as global uncertainties persist and import cover remains healthy. However, underlying pressures are building as capital flows weaken. Foreign portfolio investors have pulled out sharply, w…