.png "RBI released its report “Developments in India’s Balance of Payments during Q3 2025‑26\"")
- India’s CAD stood at USD 13.2 billion (1.3% of GDP) in Oct–Dec 2025, higher than USD 11.3 billion a year earlier due to a larger merchandise trade deficit.
- For April–December 2025, CAD narrowed to USD 30.1 billion (1% of GDP) from USD 36.6 billion (1.1%) last year.
- The merchandise trade deficit rose to USD 93.6 billion, while net services receipts increased to USD 57.5 billion, led by IT and business services.
- FDI inflows improved to USD 3 billion, but portfolio investments saw net outflows of USD 5.4 billion.
- India’s forex reserves declined by USD 24.4 billion in Q3 FY2025‑26, compared to a depletion of USD 37.7 billion last year.
- Overall, the report highlights resilience from services and FDI inflows despite trade deficit pressures.
Question:
Q.1 According to the report “Developments in India’s Balance of Payments during Q3 2025-26”, portfolio investments recorded:a) Net inflows of USD 3.2 billion
b) Net inflows of USD 5.4 billion
c) Net outflows of USD 5.4 billion
d) Net outflows of USD 10 billion
Answer: c) The report highlights net portfolio investment outflows of USD 5.4 billion, reflecting volatility in global financial markets.
