Remittances to India are expected to reach a record $137-140 billion in FY26 before stabilising at $135-137 billion in FY27, according to an SBI Research report. The estimate follows strong inflows of around $110 billion till December this fiscal, up from $100 billion in the same period last year.

The report attributes the expected rise to escalating tensions in West Asia. However, it notes that growth in remittances is likely to remain steady rather than accelerate sharply in the next fiscal year. The outlook comes after the Reserve Bank of India's Monetary Policy Committee unanimously kept the policy rate unchanged at 5.25 per cent and retained a neutral stance, indicating a wait-and-watch approach amid global uncertainty. The SBI report analyses the tone of the RBI Governor's statement.

It said the Governor's latest statement is the most cautious of his tenure, with repeated references to "uncertainty," "risk," "elevated energy prices," "slowdown," "shocks" and "disruptions." According to the report, this reflects concerns over an emerging supply-side crisis. "Energy supply shocks cannot be managed by monetary policy alone. It is prudent for the Reserve Bank to wait and assess how the situation evolves," the report said.

On growth, the RBI has projected real GDP growth at 6.9 per cent for FY27, lower than 7.6 per cent in FY26. Quarterly growth is estimated at 6.8 per cent in Q1, 6.7 per cent in Q2, 7.0 per cent in Q3 and 7.2 per cent in Q4, factoring in elevated energy prices and supply disruptions.

While exports may face pressure, the services sector remains strong. On inflation, volatility in crude oil and other commodities, along with possible El Nino conditions, could keep the outlook uncertain. However, a strong rabi crop is expected to support food supply in the near term. The RBI projects inflation at 4.6 per cent for FY27, with core inflation at 4.4 per cent.

The report also noted that the Governor's December 2025 statement had a more dovish tone when inflation was lower and geopolitical conditions were more stable. In contrast, the latest statement is seen as more cautious, though it does not signal an imminent rate hike. The report expects a prolonged pause in policy rates amid the uncertain global environment.

Published on April 10, 2026