Current Affairs · External Sector of India

Analyze the following statements concerning India's external sector in FY 2025-26: Statement A: The Current Account Deficit (CAD) is a direct measure of the amount of foreign exchange intervention required by the Reserve Bank of India (RBI) to maintain the exchange rate. Statement B: A large and persistent Current Account Deficit is solely financed by the net inflow of Foreign Portfolio Investment (FPI) into Indian debt and equity markets. Statement C: India's Foreign Exchange Reserves are primarily constituted by foreign currency assets, gold, Special Drawing Rights (SDRs), and the Reserve Position in the IMF. Statement D: The capital account balance for India has consistently been in surplus in recent years, which is a structural necessity to cover the deficit in the current account.