by 2016 – 17 from 12 per cent of gdp in 1990 – 91. along with stable form of capital flows such as fdi that come with relatively long - lasting interest in domestic entities, foreign portfolio ( both equity and debt ) capital flows have also increased making the economy ( like that of other open emerging markets ) susceptible to enhanced volatility and sudden stop or reversal risks. 9. therefore, as india – like other emerging markets – has undoubtedly benefited from globalisation, we are also more exposed than before to vulnerabilities that come in its wake. our increasing dependence on the external world is reflected in outstanding external liabilities ( both debt and non - debt ), which increased from about 30 per cent of gdp in march 2005 to 41 per cent of gdp in march 2017. india ’ s net international investment position ( i. e., outstanding assets minus liabilities ) has moved over the period from about – 7 per cent of gdp to – 17 per cent of gdp. this is consistent with a prolonged phase of running current account deficits which have been financed by increasing net liabilities to the rest of the world. with easing of limits over the years, there has been a rise in foreign portfolio capital flows. ( of course, this has to be appreciated in the context of the obvious economic benefits from international financial flows into 2 / 4 bis central bankers'speeches capital scarce countries ). 10. movement of capital in and out of the country is often linked to policy cycles in other countries which throw up the challenges of international policy spillovers. with every new tail event, the churn becomes larger, the volatility ever higher, threatening to overwhelm the modest defences that emerging markets are able to muster. how does one protect policy independence in such a world? do we need meaningful and deeper international policy coordination? or, universal financial safety nets rather than the asymmetric ones available at present only to a small number of countries, which is more reminiscent of apartheid rather than universality. meanwhile, emerging markets that are at the receiving end of global financial turbulence, are systematically denied access to such risk sharing. the time has come to end this sectarian approach and to make the access to swap lines equally available rather than only for the privileged. 2 while emerging markets have shown a degree of resilience to the turmoil of recent years, they remain vulnerable to liquidity and bridge financing gaps that are debilitating even if transitory. 3 against this background, building up

. 19. on the external front, de - globalisation and protectionism are gaining ground as witnessed during the recent global supply - chain shock. it is thus necessary to build and strengthen bilateral trade relations to deal with such challenges. india has recently signed bilateral trade agreements with the uae and australia and more such agreements are works in progress. the average current account deficit to gdp ratio stands at 3. 3 per cent during h1 : 2022 - 23. the slowing global demand is weighing on merchandise exports ; but our exports of services and remittances remain strong. the net balance under services and remittances remains in a large surplus, partly offsetting the trade deficit. consequently, the current account deficit is eminently manageable and within the parameters of viability. 20. on the financing side, net fdi flows remain strong and foreign portfolio flows have resumed since july 2022, with intermittent outflows from time to time the size of forex reserves is comfortable and has gone up from usd 524 billion on october 21, 2022 to usd 572 billion as on january 13, 2023. further, india ’ s external debt ratios are low by international standards. this has enabled the reserve bank to eschew measures to control capital flows and take steps to further internationalise the domestic currency, even during episodes of significant capital outflows. 21. every global risk - off episode resulted in an appreciating us dollar imposing downward pressures on most other currencies. comparison of the performance 10 of the rupee across successive crisis episodes source : data from bloomberg has been used to evaluate the performance of rupee. tells its own tale. during the global financial crisis, the rupee witnessed its worst depreciation - between april 1, 2008 and march 3, 2009 when it lost 23 % against the us dollar. similarly, it depreciated by 22 % during the taper tantrum between may 01, 2013 and aug 28, 2013. however, the extent of rupee depreciation was lower in each subsequent episode of turbulence. in the initial days of the pandemic, i. e., between february 17, 2020 and april 21, 2020, the rupee depreciated by only 7 %. even during the period of geopolitical tensions emerging out of ukraine in 2022, while the rupee lost 9 % against the us dollar between february 24, 2022 and october 19, 2022, it outper