(a) “The Indian economy has witnessed a sharp turnaround during 2023 – 24 with Foreign Direct Investments (FDI) inflows of US $ 70·9 Bn and net…

Foreign Direct Investment (FDI) refers to direct investment from abroad in physical assets with a considerable degree of influence and control over the firm.

Whereas;

Foreign Portfolio Investment (FPI) refers to investment from abroad in stocks, bonds or other financial assets and do not entail active management or control over the firm.

The given variables will be entered in the Capital account of the Balance of Payments.

Capital Account records all international transactions of assets.

Accommodating transactions are those international economic transactions which are undertaken (by competent authorities) to cover the surplus or deficit in Balance of Payments (BoP). These transactions are independent of any economic motive. Such transactions are called ‘below the line’ items in the BoP account.

Whereas;

Autonomous transactions are those international economic transactions which are independent of the state of Balance of Payments (BoP). These transactions are generally undertaken with an ‘economic motive’. Such transactions are called ‘above the line’ items in the BoP account.