Balance of payments

Since independence, India s balance of payments on its current account has been negative. Since economic liberalisation in the 1990s, precipitated by a balance of payment crisis, India s exports rose consistently, covering 80.3 Percent of its imports in 2002 03, up from 66.2 Percent in 1990 91. However, the global economic slump followed by a general deceleration in world trade saw the exports as a percentage of imports drop to 61.4 Percent in 2008 09.India s growing oil import bill is seen as the main driver behind the large current account deficit, which rose to $118.7 billion, or 11.11 Percent of GDP, in 2008 09.Between January and October 2010, India imported $82.1 billion worth of crude oil.

Indian economy has run a trade deficit every year over 2002 2012 period, with a merchandise trade deficit of US$189 billion in 2011 12.Its trade with China has the largest deficit, about $31 billion in 2013.

India s reliance on external assistance and concessional debt has decreased since liberalisation of the economy, and the debt service ratio decreased from 35.3 Percent in 1990 91 to 4.4 Percent in 2008 09. In India, External Commercial Borrowings ECBs , or commercial loans from non resident lenders, are being permitted by the Government for providing an additional source of funds to Indian corporates. The Ministry of Finance monitors and regulates them through ECB policy guidelines issued by the Reserve Bank of India under the Foreign Exchange Management Act of 1999.India s foreign exchange reserves have steadily risen from $5.8 billion in March 1991 to $318.6 billion in December 2009.In 2012, the United Kingdom announced an end to all financial aid to India, citing the growth and robustness of Indian economy.