- India's FY27 balance of payments is now expected to post a surplus over $50 billion
- Current account deficit forecast narrowed to 1.0-1.2% of GDP from earlier 2.2%
- Capital inflows including OFCB and ECBs projected at $103 billion, fivefold prior estimate
India's balance of payments for FY27 is now set to post a surplus of more than $50 billion, a sharp reversal from an earlier deficit call of $65-70 billion, according to SBI Research, driven largely by the Reserve Bank of India's fresh FCNR(B), OFCB and ECB inflow measures.
"Thus the overall balance of payment would be in surplus of more than $50 billion for FY27. This is way above our previous estimate of $65-70 billion deficit," the report said. The bank's economists now expect the current account deficit to narrow to 1.0-1.2% of GDP for FY27, down from an earlier projection of 2.2%, as capital account inflows are seen more than fivefold higher at around $103 billion against $20 billion previously estimated.
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The three instruments work differently. FCNR(B), or Foreign Currency Non-Resident Bank deposits, allow NRIs to hold fixed deposits in foreign currency, shielding them from rupee depreciation while earning interest. OFCB, or Overseas Foreign Currency Borrowing, refers to foreign currency loans that Indian banks or companies raise from overseas lenders to fund their operations. ECB, or External Commercial Borrowing, covers loans that Indian companies raise directly from foreign lenders to meet domestic business needs.
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FCNR(B) deposits alone have already mobilised $17.4 billion since the scheme opened, a pace SBI says has "easily crossed the total amount mobilised in 2013 in 3 months." The bank now expects total FCNR(B) inflows of $65-70 billion by the scheme's close on 30 September, sharply higher than its earlier estimate of $40-45 billion, with overall inflows including OFCB and ECBs seen reaching $80-85 billion.
SBI Reseach says that India's Balance of Payment picture has improved dramatically
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SBI flagged a lag between FCNR(B) deposit mobilisation and its reflection in RBI's foreign currency assets, which have risen by only $7.6 billion since 8 June against $17.4 billion in reported deposit inflows — a gap it attributes to the weekly cycle banks follow to swap deposits with the RBI for rupee resources.
On the rupee, the report cautioned that intervention has not kept pace with the scale of depreciation pressure. Using a Censored Tobit model, SBI found that "RBI on an average intervenes $14 million/day," a level it called insufficient given reserves of $676 billion. It contrasted this with 1997-98, when interventions under then-Governor Bimal Jalan averaged $55 million a day against reserves of just $29 billion and succeeded in halting the rupee's fall.
The rupee has depreciated roughly 12.5% since April 2025, and SBI warned that allowing further depreciation despite healthy capital inflows risks a self-fulfilling slide once the FCNR(B) window closes on September 30.
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