India May Record $50 Billion Balance Of Payments Surplus In FY27, Says SBI Research

India’s balance of payments could record a surplus of around $50 billion in FY27, with the current account deficit (CAD) estimated at 1% of GDP, SBI Research said in its latest Ecowrap report. Strong foreign currency inflows are expected to support the country’s external position.

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FCNR(B) Inflows Could Reach $85 Billion

The report said the Reserve Bank of India’s special FCNR(B) deposit mobilisation scheme has already attracted $57 billion. A further $25-30 billion could come in during the remaining days of August, taking total inflows to about $85 billion.

SBI Research said the early closure of the FCNR(B) window is unlikely to materially affect external liquidity. It estimated that combined inflows through FCNR(B) deposits, overseas foreign currency borrowings (OFCBs) and external commercial borrowings (ECBs) could reach $80-85 billion.

The RBI had also said at its latest Monetary Policy Committee meeting that India’s external financing position remained supportive, helped by foreign direct investment and foreign portfolio investment flows. It expects the balance of payments to register a healthy surplus during the year.

Swap Cost Seen As Limited

SBI Research also assessed the cost associated with the RBI’s FCNR(B) swap facility. It estimated the cumulative hedging cost over five years at $10.5 billion.

The report said this amount is equivalent to around 1.45% of India’s current foreign exchange reserves of about $700 billion. It is also estimated at roughly 1.27% of projected reserves over a five-year period.

The report said the notional cost of the FCNR(B) swap remains relatively small compared with the size of the reserve buffer being built, supporting its role as a measure to strengthen external liquidity.

Rupee Outlook And Global Risks

The rupee’s appreciation following the FCNR(B) measures has so far been limited to around 0.1%, SBI Research said. This compares with the stronger appreciation recorded after the FCNR(B) scheme introduced in 2013.

SBI Research expects the rupee to move towards the ₹95-95.5 per U.S. dollar range through the end of August and beyond. The rupee price outlook, however, is expected to differ from the movement seen in 2013.

The report also flagged external risks. U.S. 30-year Treasury yields were nearing 5.3%, while Brent crude could move towards $100 per barrel if disruptions around the Strait of Hormuz persist. A sustained rise in crude prices could affect India’s external balance by increasing the country’s import bill.

Gold Gains Larger Share Of Reserves

SBI Research further highlighted the need for continued diversification of India’s foreign exchange reserves. Gold accounted for a record 16.7% of reserves in FY26 before easing to 15.38% as of August 7.

The figures underline the changing composition of India’s reserve portfolio as the country continues to strengthen its external buffers. With substantial foreign currency inflows and a contained CAD, SBI Research expects the balance of payments to remain in surplus in FY27.