As a developing economy, we run a large current account deficit (CAD) that has in recent period expanded relative to our historical record. We need capital flows to finance the CAD. We have an express preference for equity flows over debt flows, for direct investment over portfolio investment and for long term over short term flows and.
We are moving gradually towards opening our capital account along a roadmap, the roadmap itself being recalibrated to the evolving global situation. Our policy, in short, is festina lente which is Latin for “make haste slowly”. India co-chairs, along with Canada, the G 20 Framework “MAP” Working Group (FWG).