📄 Abstract
India’s external sector plays a crucial role in maintaining macroeconomic stability through the interaction of the current account and capital and financial flows. The COVID-19 pandemic led to an unusual external-sector adjustment, with India recording a current account surplus in 2020–21. As economic activity recovered, rising commodity prices and merchandise imports widened the current account deficit (CAD) during 2021–22 and 2022–23. The CAD subsequently narrowed due to resilient services exports, moderation in commodity prices and strong remittance inflows. This study analyses India’s current account balance and capital/financial flows during the post-COVID-19 period, covering FY2020–21 to FY2024–25. The study is descriptive and analytical and relies exclusively on secondary data from the RBI, Government of India, IMF and other authoritative sources. The findings indicate considerable fluctuations in India’s external-sector position during the study period. FDI emerged as a relatively stable source of external financing, while FPI remained more volatile and sensitive to global financial conditions. Strong services exports and remittances helped contain external vulnerability. However, merchandise trade deficits, crude-oil import dependence and capital-flow volatility remain key challenges. The study recommends export diversification, greater domestic value addition, energy diversification and stable long-term capital inflows to strengthen India’s external-sector resilience.
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📚 How to Cite:
Dr. BSV Meera Setty , INDIA’S CURRENT ACCOUNT AND CAPITAL FLOWS IN THE POST-COVID-19 ERA: TRENDS, AND EMERGING OPPORTUNITIES: A STUDY , Volume 13 , Issue 9, September 2026, EPRA International Journal of Economics, Business and Management Studies (EBMS) , Pages: 75 - 85 ,