Question

State any four items of capital account of the balance of payments account.

Explain any four items of capital account of the balance of payments account.

Answer 1

1. Foreign Direct Investment (FDI): Investment made by foreign companies to build factories or businesses in the country.
2. Foreign Portfolio Investment (FPI): Foreigners investing in Indian shares, bonds, or stock markets.
3. Loans and borrowings: Money borrowed from foreign governments, banks, or international organisations.
4. Banking capital: Movements of foreign money into or out of banks, like NRI deposits in Indian banks.