How India Is Turning Global Turmoil Into a Balance of Payments Surplus

For the first time in years, India's Balance of Payments which is the country’s external account is on track to end the year with more dollars coming in than going out. SBI Research's latest Ecowrap report expects India's balance of payments (BoP) to record a surplus of roughly $50 billion in FY27, with the current account deficit, the gap between what the country earns abroad and what it spends, held to just 1% of GDP. That is a striking turnaround from the earlier expectation of a wide deficit. So how did India pull this off while oil prices stayed high and global money stayed nervous?

The answer lies in a well-timed set of moves by the Reserve Bank of India (RBI) and the government, designed to attract dollars into the country when the world was pulling them out.

The centrepiece is the RBI's special FCNR(B) deposit scheme. In plain terms, FCNR(B) accounts let Indians living abroad park their savings in Indian banks in foreign currency, without worrying about the rupee weakening. To make these deposits more appealing, the RBI announced on 5 June 2026 that it would absorb the full cost banks normally pay to protect against currency swings, a saving of around 3% a year. It also freed these deposits from the usual reserve requirements (CRR and SLR), so banks could lend the entire amount and pass on the savings as higher interest. The result: deposit rates jumped to as high as 7.1%, up from the earlier 2–4% range, as tracked by lenders.

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The response was faster and bigger than anyone expected. By 13 August, the three channels together, FCNR(B) deposits plus overseas and external commercial borrowings had drawn in $56.85 billion, with FCNR(B) alone accounting for $52.3 billion, according to RBI data. Inflows had nearly doubled in two weeks, from about $40.8 billion at the end of July. Confident it had raised enough, the RBI decided to close the deposit window a month early, on 31 August instead of 30 September, a rare case of a scheme being wound down because it worked too well.

This flood of dollars is already visible in the country's savings. India's foreign exchange reserves climbed $14.14 billion in a single week to reach $707 billion by 7 August, the biggest weekly jump since January with the RBI's own data showing reserves have grown by roughly $40 billion in just six weeks. RBI Governor Sanjay Malhotra noted at the August policy meeting that these reserves now cover more than ten months of imports, a comfortable cushion by global standards.

The government played its part too, removing taxes on capital gains and interest for foreign investors in government bonds, making it easier for global funds to invest.

What about the cost? Some worried that the RBI taking on the currency risk would prove expensive. SBI Research put those fears to rest, estimating the five-year hedging bill at about $10.5 billion, just 1.45% of the reserves being built up. In other words, a small insurance premium for a much larger buffer.

The bigger picture for young Indians is reassurance. A steady pile of reserves means a more stable rupee, softer import bills, and room for the economy to keep growing even when the world outside is shaky. Rather than being buffeted by global storms, India has quietly strengthened its own footing, turning a moment of worldwide uncertainty into a position of quiet strength.