If another global financial crisis happens in the near future, which of the following actions /policies are most likely to give some immunity to India? 1) Not depending on short-term foreign borrowings 2) Opening up to more foreign banks 3) Maintaining full capital account convertibility Select the correct answer using the code given below:

The correct answer is A (1 only). The question asks what makes India insulated from a sudden global shock, and the logic is about external vulnerability: sudden stops and rollover risk hit hardest when a country depends on short-term foreign money.

• Statement 1 is correct. Short-term external debt has to be repaid or rolled over quickly, so when global lenders retreat, reserves drain fast. The 1997 Asian crisis and 2008 showed this. India's external debt policy has deliberately favoured long-term debt, FDI and FPI-in-equity, and it monitors the short-term debt to forex reserves ratio.
• Statement 2 is wrong as an immunity measure. More foreign bank presence brings in global funding channels and balance-sheet contagion. India was relatively insulated in 2008 because of RBI's prudential regulation, a large public sector banking base and limited exposure to toxic assets, not because of foreign bank entry.
• Statement 3 is wrong. Full capital account convertibility increases exposure to capital flight. The Tarapore Committee (2006) recommended calibrated CAC with preconditions, and India has not adopted full CAC. The RBI's approach has been calibrated opening.

Mains angle: this links to the debate on external sector management, the trilemma of exchange rate, monetary autonomy and capital mobility, and the Tarapore framework.

Trap: aspirants assume that more openness or more foreign banks always means more strength. The question is about shock absorption, not integration.