RBI Sees Healthy FY27 BoP Surplus After June Measures

RBI Governor Sanjay Malhotra said India is expected to post a healthy balance-of-payments surplus in FY27 after June capital measures drew strong foreign inflows, led by FCNR(B) deposits.

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The Reserve Bank of India expects the country’s balance of payments, or BoP, to post a healthy surplus in FY27 after a June package of capital measures began attracting strong foreign inflows, Governor Sanjay Malhotra said on Wednesday.

“Capital flow measures undertaken in June have supported inflows. As a result, the balance of payments is expected to register a healthy surplus this year,” Malhotra said, according to a Livemint report. The statement is the RBI’s clearest indication yet that the June package aimed at boosting foreign capital has started strengthening India’s external account.

The numbers behind that assessment are substantial. In 53 days, India mobilised $40.8 billion under the measures, with FCNR(B) deposits accounting for 90% of the total, the report said. The scheme was announced at the RBI’s previous policy review on 5 June, rolled out three days later and is due to run until the end of September.

June measures appear to be feeding directly into the external account. The RBI’s signal matters because the June steps were introduced at a time when policymakers were looking to shore up foreign exchange inflows amid global trade uncertainty and financial-market volatility.

FCNR(B) inflows have been central to that effort. The scheme allows non-resident Indians to place fixed deposits with Indian banks in foreign currency, helping banks mobilise overseas funds without exposing depositors to rupee volatility in the same way as local-currency deposits.

The pace of inflows under FCNR(B), external commercial borrowings and overseas foreign-currency borrowing has been much stronger than expected. That has improved the market’s reading of India’s near-term external financing position.

Surplus estimate revised higher

The improved outlook is also being reflected in private-sector estimates.

According to an IDFC FIRST Bank report dated 3 August cited by Livemint, India’s FY27 BoP surplus is now estimated at $40 billion, up from an earlier estimate of $25 billion. The same report pegged the current account deficit at 1.7% of GDP.

That revision is important because it suggests the external balance may improve even as India continues to run a current account deficit. In practical terms, stronger capital inflows can more than offset the trade and current account gap, allowing the overall balance of payments to stay in surplus.

FDI and portfolio flows also improved

The broader capital-account picture has also strengthened.

Gross foreign direct investment inflows rose to $30.7 billion during April-June 2026, up from $26.7 billion a year earlier, according to the report. Foreign portfolio flows also turned positive in June and July, with net inflows of $7.1 billion, mainly into debt, after outflows in April and May.

Taken together, those trends support the RBI’s view that the external sector remains resilient even in a difficult global environment.

Forex reserves and rupee stability remain central

Malhotra said India’s foreign exchange reserves remain comfortable by standard reserve-adequacy measures. According to the report, reserves provide more than 10 months of import cover and cover 90.8% of external debt.

That gives the RBI a larger buffer as it manages external risks. A stronger reserve position can help the central bank limit pressure on the rupee during periods of geopolitical stress or market volatility, even if it does not aim to target any fixed exchange rate.

The governor reiterated that the rupee will continue to be determined by market forces, with the RBI stepping in only to curb excessive volatility, prevent disorderly movements and check speculative pressures.

Risks remain despite the stronger inflow picture

The RBI’s view is not without caution.

Malhotra said weaker global trade growth, higher energy prices and persistent trade policy uncertainty remain upside risks to India’s current account deficit in 2026-27. Those risks could widen the import bill or disrupt external demand if global conditions worsen.

At the same time, the report noted potential offsets. These include the India-UK trade agreement, other recently concluded trade deals, strong services exports and buoyant inward remittances.

That means the FY27 external outlook is improving, but it is still exposed to global shocks.

Why this matters for markets

For the market, the significance of the RBI’s assessment is straightforward. A healthier BoP position can support the rupee, improve confidence in the external account and give monetary policy more room to focus on domestic growth and inflation instead of short-term currency stress.

The RBI is not calling the risk picture closed. But it is signalling that the June capital measures have delivered a stronger-than-expected response and are already feeding into a more supportive external balance for FY27.That is a notable shift in the macro backdrop, especially after months of concern over capital flows, trade uncertainty and currency pressure.