Capital Account Convertibility and India

Abstract

Capital account convertibility facilitates conversion of domestic financial assets into foreign financial assets or vice versa at market exchange rates. In other words, it refers to restriction free inflow and outflow on capital account of a county. It can be totally unrestricted (full capital account convertibility) or partially restrained (partial capital account convertibility). This study aims to strengthen the knowledge about CAC and current status of India in this regard.