Barclays sees FCNR inflows falling short of market hype
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Barclays stays hopeful that RBI actions will bolster India’s balance of payments.
| Photo Credit:
Dado Ruvic
India’s attempt to boost its external stance via the RBI’s special FCNR(B) deposit program has drawn a weaker response than markets first anticipated, per a Barclays FX Insights India Report.
Although the scheme aims to pull in foreign currency deposits from non‑resident Indians (NRIs) and shore up forex reserves, the inflows received to date are far beneath the high forecasts circulating in the market.
According to the Barclays report, FCNR inflows so far total roughly $5‑6 billion, while market forecasts have ranged from $40 billion to $70 billion. Barclays’ own base‑case outlook called for a more modest $25‑30 billion inflow over the next months.
FCNR deposits
The report suggests that expectations were boosted by comparisons with the RBI’s successful 2013 FCNR initiative, yet today’s environment is quite different. Elevated US interest rates and appealing dollar‑based investment alternatives have lessened the draw of FCNR deposits for NRIs. Barclays also pointed out that hurdles in implementing leveraged structures and GIFT City setups may have dampened participation.
Even though FCNR inflows have fallen short of expectations, Barclays remains hopeful that RBI measures will strengthen India’s balance of payments. Nevertheless, the report cautions that fresh geopolitical tensions in the Middle East, climbing crude oil prices and robust dollar demand from importers could keep the rupee under pressure, with the bank still anticipating a gradual depreciation.
Published on July 16, 2026
