External Sector and Trade — Mains Questions

Critically analyze the evolution of India's Foreign Trade Policy since 1991, highlighting its key objectives and the challenges in achieving them. (250 words, 15 marks)

Discuss the various components of India's Balance of Payments (BOP) and explain how a persistent Current Account Deficit (CAD) is financed. What are the implications of different financing sources for India's external sector stability? (250 words, 15 marks)

Examine the role of the Reserve Bank of India (RBI) in managing India's exchange rate and foreign exchange reserves. What are the challenges faced by the RBI in maintaining exchange rate stability in a 'managed float' regime? (250 words, 15 marks)