India's BoP Surplus Forecast: Strong Inflows Boost Fiscal Stability

India is projected to see a BoP surplus of USD 50 billion in FY27 as foreign currency inflows bolster its economy. SBI Research indicates a controlled CAD at 1% of GDP. Despite early FCNR(B) closure, strong inflows and strategic reserve diversification by RBI sustain external stability.

India's balance of payments (BoP) is projected to record a USD 50 billion surplus in FY27, driven by robust foreign currency inflows that are expected to enhance the nation's external financial position. According to SBI Research, the current account deficit (CAD) is anticipated to stay contained at 1% of GDP.

In SBI's Ecowrap report, it was highlighted that the Reserve Bank of India's special FCNR(B) deposit scheme had already amassed USD 57 billion in inflows, with expectations of an additional USD 25-30 billion by the end of August. This inflow trend is likely to bring total collections to approximately USD 85 billion.

The report also downplayed the impact of the premature closure of the FCNR(B) window on external liquidity, with predictions that inflows from FCNR(B), overseas foreign currency borrowings (OFCBs), and external commercial borrowings (ECBs) could cumulatively reach USD 80-85 billion. Moreover, it countered concerns about the costs associated with the RBI's swap facility, emphasizing its minimal impact relative to the overall size of India's foreign reserves.