India BoP Seen in Surplus in FY27 on RBI Inflows

HDFC Bank said inflows under the RBI’s FCNR(B) deposit and overseas borrowing windows should carry the day. As of Aug. 31, total foreign exchange inflows under the RBI’s special dollar-rupee swap facility had reached $136.38 billion, including $127.23 billion through FCNR(B) deposits, $5.26 billion from overseas foreign currency borrowings and $3.89 billion from external commercial borrowings.

The call comes after India’s BoP posted an $8.1 billion deficit in the June quarter, versus a $4.5 billion surplus a year earlier. The capital account slipped to a $5.5 billion deficit and foreign portfolio investors were net sellers of $9.6 billion, underscoring how vulnerable the external account can be when global risk appetite fades.

The CAD remained contained at $4.2 billion, or 0.5% of GDP, in the quarter, but the trade gap widened sharply as merchandise imports jumped 20% to $218 billion and the merchandise deficit widened to $86.1 billion. HDFC Bank said higher crude and precious metal prices drove much of the increase, even as services receipts and remittances softened the blow.

For investors, the key takeaway is that India’s external financing story still looks manageable, but not immune to oil, yields and capital-flow shocks. HDFC Bank is assuming average crude at $85 a barrel in FY27 and warned that a prolonged rise in oil prices could push the CAD higher, while it sees the rupee weakening modestly to 95-97 per dollar by December-end.

That outlook leaves the RBI with some room, but also keeps the market focused on the durability of special inflows, the path of crude and whether foreign investors return to Indian assets. If global yields stay elevated and West Asia tensions keep energy markets volatile, the surplus forecast could narrow quickly.