Foreign Currency Deposits Could Bring USD 70-80 Billion into India, Say Experts

India's special Foreign Currency Non-Resident (FCNR) deposit initiative could attract between USD 70 billion and USD 80 billion in overseas capital from Non-Resident Indians (NRIs), according to experts, potentially providing a significant boost to the country's foreign exchange reserves and strengthening the rupee amid global economic uncertainty. The optimism comes as the Reserve Bank of India (RBI) has temporarily relaxed norms to encourage higher FCNR deposits, with the special window remaining open until September 30, 2026 .

Speaking to PTI, Sanjay Gattani , Chairman of the Singapore Chapter of the Institute of Chartered Accountants of India (ICAI) , said nearly USD 10 billion has already been mobilised under the initiative. He estimated that the scheme could eventually attract USD 70-80 billion in foreign currency inflows, significantly improving India's external financial position while allowing overseas Indians to contribute directly to the country's growth.

The projections were discussed during a global webinar organised by the ICAI Singapore Chapter , the ICAI International Affairs Committee , and 25 overseas ICAI chapters . Held on July 15 , the event drew nearly 1,800 participants , including chartered accountants, NRIs, accredited investors, business leaders, family offices and finance professionals. According to Gattani, the participants alone had the potential to facilitate investment commitments worth over USD 2 billion , reflecting strong confidence among the global Indian diaspora.

The FCNR(B) deposit scheme allows NRIs, Overseas Citizens of India (OCIs) and Persons of Indian Origin (PIOs) to invest in fixed deposits denominated in major foreign currencies, including the US Dollar, Euro, British Pound, Japanese Yen, Australian Dollar and Canadian Dollar . Since deposits remain in foreign currency, investors are protected from exchange-rate fluctuations while enjoying full repatriation of both principal and interest.

The RBI introduced a special concessional foreign exchange swap facility for banks to reduce hedging costs, enabling lenders to offer significantly higher interest rates—currently in the 6-7 per cent range on fresh FCNR(B) deposits with maturities of three to five years . The central bank has also allowed banks to extend loans against FCNR deposits through domestic branches, overseas branches and GIFT City units, making the scheme more flexible for investors.

The initiative comes as India seeks to strengthen its foreign exchange reserves amid pressure on the rupee from high crude oil prices , the West Asia conflict , and global financial volatility. Economists believe FCNR inflows provide a more stable source of foreign capital than volatile portfolio investments, helping improve India's external financing position, reinforce macroeconomic stability and boost investor confidence.

The current programme is also drawing comparisons with the RBI's successful 2013 FCNR swap window , launched during the "taper tantrum." That initiative mobilised around USD 34 billion in foreign currency, including nearly USD 26 billion through FCNR(B) deposits, helping stabilise the rupee and rebuild forex reserves. Analysts say the present scheme is even more attractive because the RBI is bearing banks' hedging costs, allowing lenders to offer more competitive returns.

Banking industry estimates further underscore the scheme's potential. State-owned banks alone expect to mobilise around USD 30 billion , with larger lenders targeting USD 4-5 billion each and smaller banks aiming for USD 1-2 billion . Officials expect inflows to accelerate as the September 30 deadline approaches, similar to the trend witnessed during the 2013 programme.

Senior representatives from HDFC Bank, HSBC and State Bank of India (SBI) participated in the ICAI webinar, explaining the investment framework, regulatory requirements, taxation and operational aspects of FCNR deposits. ICAI Singapore Chapter Vice-Chairman Kushal Jaju said the interactive session addressed a wide range of investor queries, while Gattani described the current FCNR initiative as a "once-in-a-generation opportunity" for the Indian diaspora to earn competitive returns while supporting India's long-term economic growth.