INDIA’S BALANCE OF PAYMENTS AND IMPORT DEPENDENCY: ANALYZING RISKS AND CORRECTIVE STRATEGIES

India's Balance of Payments (BoP) is crucial for assessing external stability and financial health.This study examines the impact of imports on BoP trends from 2022 to 2025, highlighting key challenges and corrective measures.India's Current Account Deficit (CAD) fluctuates due to trade imbalances, capital inflows, and forex reserve management.High import dependence, particularly on crude oil and electronics, strains the trade balance, affecting currency stability and economic resilience.Using a mixed-method approach, the study analyzes data from institutions like the Reserve Bank of India (RBI) and the International Monetary Fund (IMF).While CAD improved in 2023-24, trade imbalances persist.FDI and NRI deposits bolster financial stability, but FPI outflows add uncertainty.Exchange rate fluctuations and forex reserve volatility further expose vulnerabilities.To address these issues, the study recommends export promotion, domestic manufacturing growth under Atmanirbhar Bharat, and import substitution in key sectors.Strengthening forex reserves, attracting foreign capital, and diversifying energy sources, including renewable energy and ethanol blending, are essential for stability.These measures can help India reduce import dependency, enhance trade competitiveness, and achieve a sustainable BoP equilibrium.