India may attract up to $95 billion inflows in FY27 on strong FCNR response: Report
New Delhi, Aug 14 (IANS) Robust foreign currency non‑resident (bank) FCNR(B) inflows and related measures from RBI are now expected to generate $90–95 billion of capital inflows in FY27, lifting India’s balance of payments to a surplus of $64 billion, a report has said.
The report from CareEdge Ratings said the agency has revised up its FCNR(B) projection to about $80 billion and expects External Commercial Borrowings and Overseas Foreign Currency inflows at $10–15 billion.
Consequently, India’s capital account surplus is now expected to increase to approximately $108 billion, compared with a surplus of just $2 billion in the previous year
The report added that the BoP is forecast to improve to a $64 billion surplus in FY27 from deficits of $23.6 billion in FY26 and $5 billion in FY25.
“This would represent a substantial strengthening of India’s external position and provide an important buffer against global volatility,” the ratings agency said.
The concessional swap windows for FCNR(B) deposits, External Commercial Borrowings (ECBs) and Overseas Foreign Currency Borrowings (OFCBs), amongst other policy measures announced on June 5, 2026, have seen a strong response.
The firm noted these measures have attracted USD 40.8 billion, with FCNR(B) inflows accounting for $36.7 billion, and ECBs and OFCBs together accounting for $4.1 billion between June 5 and July 31, 2026.
Large banks are currently offering deposit rates in the 6.0-6.5 per cent range, while some smaller and newer banks are offering rates close to 7 per cent for FCNR deposits.
Additionally, the availability of significant leverage for investors, with some foreign banks reportedly offering leverage as high as 19-fold to 29-fold in some cases, appears to have enhanced the attractiveness of the scheme and supported stronger-than-expected participation.
The report noted that strong capital inflows could ease domestic liquidity as banking system liquidity averaged around Rs 1.1 trillion in July and has risen to Rs 3 trillion so far in August, supported by month‑end inflows.
—IANS
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