For India, with its persistent CAD problem lower and sustainable level of CAD is very important having far reaching implications on the policy making processes and also on the way international institutions and investors view us.
Among these I include financial market deregulation, tariff reductions, privatisations, competition policy and decentralisation of the labour market. These have all made a contribution, but it is probably the interaction between them that is more important; in this sense, the total effect is more than the sum of the parts.