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India has come a long way in liberating the capital account transactions in the last three decades and currently has partial capital account convertibility.
Which of the recent moves indicate the above statement?
1. Increasing the foreign portfolio investment limits in the Indian debt markets
2. Introducing the Fully Accessible Route (FAR) — through which non-residents can invest in specified government securities without any restrictions
3. Easing of external commercial borrowing
4. Allowing outbound FDI by Indian incorporated entities
Select the correct answer code:
  • a)
    1, 2, 3 
  • b)
    1, 3, 4 
  • c)
    2, 3, 4 
  • d)
    1, 2, 3, 4
Correct answer is option 'D'. Can you explain this answer?
Verified Answer
India has come a long way in liberating the capital account transactio...
India has come a long way in liberating the capital account transactions in the last three decades and currently has partial capital account convertibility.
Some of the recent moves include increasing the foreign portfolio investment limits in the Indian debt markets, introducing the Fully Accessible Route (FAR) — through which non-residents can invest in specified government securities without any restrictions and the easing of the external commercial borrowing framework by relaxing end-user restrictions. Inward FDI is allowed in most sectors, and outbound FDI by Indian incorporated entities is allowed as a multiple of their net worth.
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Most Upvoted Answer
India has come a long way in liberating the capital account transactio...

Increasing the foreign portfolio investment limits in the Indian debt markets
- This move allows foreign investors to invest more in Indian debt markets, indicating a liberalization of capital account transactions.

Introducing the Fully Accessible Route (FAR)
- The introduction of FAR allows non-residents to invest in specified government securities without any restrictions, promoting capital flows.

Easing of external commercial borrowing
- By easing restrictions on external commercial borrowing, India is facilitating the inflow of foreign capital into the country.

Allowing outbound FDI by Indian incorporated entities
- Allowing outbound foreign direct investment by Indian incorporated entities demonstrates a liberal approach towards capital movements.

By implementing these measures, India has shown progress in liberating capital account transactions and moving towards partial capital account convertibility.
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India has come a long way in liberating the capital account transactions in the last three decades and currently has partial capital account convertibility.Which of the recent moves indicate the above statement?1. Increasing the foreign portfolio investment limits in the Indian debt markets2. Introducing the Fully Accessible Route (FAR) — through which non-residents can invest in specified government securities without any restrictions3. Easing of external commercial borrowing4. Allowing outbound FDI by Indian incorporated entitiesSelect the correct answer code:a)1, 2, 3b)1, 3, 4c)2, 3, 4d)1, 2, 3, 4Correct answer is option 'D'. Can you explain this answer?
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