India's current account deficit (CAD) is expected to remain in the range of 1.5-1.7 per cent of GDP in FY27, but a series of recent measures announced by the Reserve Bank of India (RBI) could help improve the country's external position and push the overall balance of payments (BoP) into surplus, according to a report by SBI Research.

The report said the RBI's February and June 2026 measures should be seen as a coordinated effort to strengthen the rupee, attract foreign capital and support external sector stability. "The RBI's February and June 2026 measures should be viewed as a coordinated attempt to stabilise the rupee, deepen the domestic debt market, attract more stable foreign capital and reduce friction for external funding," the report said.

The report also mentioned that India is expected to continue running a current account deficit in FY27. However, the deficit can be comfortably financed through fresh foreign currency inflows generated by the RBI's latest measures. It stated, "The overall balance of payment would be in the range of $5 to $10 billion surplus for FY27. This is way above our previous estimate of $65-70 billion deficit. Subsequently, the current account deficit would be in the range of 1.5-1.7 per cent of GDP for FY27."

The report estimates that inflows through various channels could total $55-65 billion during FY27. It expects around $40-45 billion to come through the FCNR(B) route. The report noted that banks can offer attractive FCNR(B) deposit rates in the range of 5.5-6 per cent. It added that the RBI's decision to waive Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements on fresh FCNR(B) deposits, along with bearing hedging costs, has made the scheme more attractive.

In addition, the ECB/ OFCB swap window is expected to attract another $15-20 billion by encouraging fresh foreign currency borrowings and improving dollar liquidity in the market. According to SBI Research, these inflows could significantly improve India's external account position.

SBI Research believes the expected inflows would also strengthen the RBI's foreign exchange reserves and enhance its ability to manage volatility in the currency market. The report also noted that the inflows could support banking system liquidity as well. It estimates that deposit growth for the banking system could rise to around 14.5-15 per cent in FY27 against potential credit growth of 16 per cent, helping narrow the credit-deposit gap.

The Reserve Bank of India (RBI) on Monday exempted fresh Foreign Currency Non-Resident (Bank) deposits mobilised by banks from Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements, in a move aimed at facilitating foreign currency inflows under the announced US Dollar-Rupee swap facility.

In four separate notifications issued on Monday for commercial banks, small finance banks, rural co-operative banks and regional rural banks, the central bank said the exemption would apply to fresh FCNR(B) deposits with a minimum tenor of three years and a maximum tenor of five years, raised up to September 30, 2026.

According to SBI Research, the expected capital inflows, stronger foreign exchange reserves and an improved balance of payments position could help strengthen India's macroeconomic stability during FY27 despite the current account deficit remaining in place.

Published on June 10, 2026