$52.3 billion FCNR inflows strengthen India’s BoP, provide floor to rupee: CEA V. Anantha Nageswaran
ADVERTISEMENT
The RBI's successful mobilisation of FCNR (B) deposits has lent very strong support to India's balance of payments, and also provides a floor to the domestic currency against the US dollar, Chief Economic Advisor V Anantha Nageswaran said on Monday.
The Reserve Bank of India (RBI) introduced a special USD-INR Forex Swap facility covering FCNR(B) deposits, ECBs and OFCB inflows on June 8, 2026 to strengthen India's external sector position and support foreign exchange liquidity amid global market uncertainties.
As per the latest RBI data, India attracted $56.84 billion, including $52.3 billion under the Foreign Currency Non-Resident (Bank) or FCNR (B) deposits.
"RBI's successful mobilisation of FCNR deposits lends a very strong level of support for the balance of payments and also provides a floor on the Indian rupee vis-a-vis the United States dollar," Nageswaran said in a statement post release of the first quarter GDP data.
Domestic momentum remains strong
Highlighting the various aspects of the economy, the CEA said the resilience in the quarterly data is well backed by high frequency indicators.
"...the near term, the domestic economic momentum is very strong, but globally, we are continuing to see uncertainties. We have flagged it in the Economic Review for August. There is concern with respect to the level of interest rates and potential disruptions on energy commodity supplies and also what will happen to the food prices, et cetera," he said.
Nageswaran further said there are multiple issues that are still in the air as far as global affairs are concerned.
"And at some point, they may have an impact on economic activity in the country. But as of now, the domestic momentum and export performance have both combined to deliver another quarter of very strong growth, vindicating the beneficial effects of macroeconomic structural reforms that have been implemented over the last 12 years," he added.
The CEA said the country is now reaping the benefits of the structural reforms in a very uncertain global environment.
Manufacturing, services support GDP growth
He also said all the three sectors -- primary, secondary and tertiary -- have contributed to the GDP growth in the first quarter of the fiscal.
"...agriculture slightly less so but we have manufacturing and services doing quite well in the first quarter in general despite the West Asia related uncertainties partly because of the government's efforts to make sure that input provisions were not affected by the war in West Asia," he said.
The 'agriculture, livestock, forestry and fishing' recorded a growth of 3.6% in the first quarter compared to 4.4% in the year-ago period.
India's economy grew at a faster-than-expected 7.8% in the April-June quarter, showing resilience in the face of concerns that the war in Iran and resulting global economic uncertainty could weigh on growth.
Gross domestic product (GDP) growth in the first quarter of the 2026-27 fiscal year slowed from a barnstorming 8.6% in the previous quarter, but remained well above expectations when the conflict erupted and disrupted energy markets.
The pace, that keeps India as the world's fastest growing major economy, also exceeded the Reserve Bank of India's forecast of 7% for the quarter, underscoring the strength of domestic economic activity despite heightened geopolitical risks.