With the financing requirement of the current account deficit being modest, the rising profile of net capital flows has resulted in steady accretions to the foreign exchange reserves, which have more than doubled from $ 76 billion at the end of March 2003 to around $ 200 billion at the end March 2007.
While the level of foreign exchange reserves is extremely modest compared to that of Japan, our reserves exceed each – a full year’s imports as well as the entire external debt. Since 2002, India has turned creditor to the IMF and has engaged in prepaying external debt.