India: BoP swings – from deficit to surplus

Research evidence excerpt

India: BoP swings – from deficit to surplus

Global Markets Research

19 June 2026Asia Insights

Economics - Asia ex-Japan

Research Analysts

India: BoP swings – from deficit to surplus Asia Economics

Aurodeep Nandi - NFASL

Lower oil prices, gold import restrictions and measures to attract capital inflows aurodeep.nandi@nomura.com

could swing the BoP from a deficit to a surplus of over USD40bn in FY27. +91 22 4037 4087

Sonal Varma - NSL

• Phased policy response to external pressures: Since May 2026, India has rolled sonal.varma@nomura.com

out policy measures in broadly two waves; the first targets the current account +65 6433 6527

(gold/silver import duty hikes, austerity advocacy) and the second bolsters the capital

account through FCNR(B) deposit incentives, concessional External Commercial

Borrowing (ECB) swaps and tax relief for FPIs investing in government securities. In

this note, we explore the Balance of Payments (BoP) implications of these measures.

• FCNR(B) scheme could attract ~USD55bn: The RBI is fully absorbing hedging costs

for banks raising 3–5 year foreign currency deposits from non-resident Indians (NRIs)

who can access leverage, with CRR/SLR exemptions and deposit rates hiked to 6–

7%. Based on the growing size and income of the Indian diaspora, inflows could

conservatively reach USD55bn (1.4% of GDP), in line with the upper end of past FX

mobilisation episodes.

• ECBs via the public sector may add ~USD20bn: A concessional forex swap at a

fixed 1.5% rate could incentivise public sector companies to borrow abroad. Historical

evidence shows a mixed impact on inflows from ECB liberalisation, determined by

global conditions and domestic investment appetite.

• Bond index inclusion focus: The removal of capital gains and withholding taxes on