Lok Sabha Question No. 5106 (UNSTARRED), answered on 2023-04-03
Subject: Forex Reserve of India
Ministry: FINANCE
Asked by: Umesh G. Jadhav, Sanganna Amarappa Karadi, L.S. Tejasvi Surya

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF ECONOMIC AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 5106 DUE FOR ANSWERED ON APRIL 03, 2023

## FOREX RESERVE OF INDIA

5106. Dr. Umesh G. Jadhav : Shri Sanganna Amarappa : Shri L. S. Tejasvi Surya :

Will the Minister of FINANCE be pleased to state:

- (a) whether the forex reserves has doubled in the last six years and if so, the details thereof and the total forex reserves in the country as on date;
- (b) whether the Government has utilised any amount of forex reserves for payoffs and loan repayments in the last ten years and if so, the details thereof; and (c)  the  steps  taken  by  the  Government  to  improve  foreign  exchange  reserves  to  reach  the
- levels of China, Japan and Switzerland?

## ANSWER

## THE MINISTER OF STATE FOR FINANCE (SHRI PANKAJ CHAUDHARY)

- (a) The  foreign  exchange  reserves  of  the  country  have  increased  from  USD  369,955 million (₹23,98,200 crore) as on March 31, 2017 to USD 572,801 million (₹47,27,502 crore) as on March 17, 2023.
- (b) External  debt  can  be  raised  by  private  entities  as  well  as  the  Government.  The repayment of such debts is done by respective entities, sourcing foreign exchange requirements from foreign exchange markets.
- (c) Accretion  to  or  depletion  of  forex  reserves  depends  on  the  amount  of  net  capital inflows through the capital account and the absorption of such inflows by the economy as measured by the balance on the current account of the balance of payments.  If the capital inflows  are  more  than  the  absorptive  capacity  represented  by  the  current  account  deficit (CAD), the excess capital inflows would add to the forex reserves.

The  Government  has  taken  various  measures  to  encourage  foreign  direct  investment  and foreign portfolio investments and also enhance exports. The Government has taken, inter-alia, the following measures to boost exports and reduce trade deficit:

- i. Foreign Trade Policy (2015-20) extended upto 31-03-2023.
- ii. Interest Equalization Scheme on pre and post shipment rupee export credit has also been extended upto 31-03-2024.
- iii. Assistance  provided  through  several  schemes  to  promote  exports,  namely,  Trade Infrastructure  for  Export  Scheme  (TIES)  and  Market  Access  Initiatives  (MAI) Scheme.
- iv. Rebate of State and Central Levies and Taxes (RoSCTL) Scheme to promote  labour oriented textile export has been implemented since 07.03.2019.
- v. Remission  of  Duties  and  Taxes  on  Exported  Products  (RoDTEP)  scheme  has  been implemented since 01.01.2021.
- vi. Common Digital  Platform  for  Certificate  of  Origin  has  been  launched  to  facilitate trade and increase Free Trade Agreement (FTA) utilization by exporters.
- vii. 12  Champion Services Sectors have been identified for promoting and  diversifying services exports by pursuing specific action plans.
- viii. Districts  as  Export  Hubs  has  been  launched  by  identifying  products  with  export potential  in  each  district,  addressing  bottlenecks  for  exporting  these  products  and supporting local exporters/manufacturers to generate employment in the district.
- ix. Active  role  of  Indian  missions  abroad  towards  promoting  India's  trade,  tourism, technology, and investment goals has been enhanced.
- x. Package  announced  in  light  of  the  COVID  pandemic  to  support  domestic  industry through various banking and financial sector relief measures, especially for MSMEs, which constitute a major share in exports.

To promote Foreign Direct Investment (FDI), the Government has put in place an investorfriendly policy, wherein except for a few sectors, most sectors are open for 100% FDI under the  Automatic  route.  Further,  the  policy  on  FDI  is  reviewed  on  an  ongoing  basis,  and  its provisions  have  been  progressively  liberalized  and  simplified  across  various  sectors  in  the recent past to make India an attractive investment destination.