Key Takeaways
- India’s GDP is projected to grow by 8% in Q1 FY27, supported by strong credit and deposit momentum.
- Foreign-currency inflows have reached nearly $52.3 billion, with an expected total of $70 billion by the end of the FCNR(B) scheme.
- The corporate sector is showing resilience, with 2257 non-BFSI companies reporting significant growth in net sales and profits.
Economic Resilience and Growth Insights
India’s economy is anticipated to maintain a robust growth trajectory, with a report from SBI Research forecasting a real GDP growth rate of 8% for the first quarter of fiscal year 2027. This optimistic outlook coincides with the celebration of India’s 80th Independence Day, highlighting strong momentum in credit and deposits resulting from substantial foreign-currency inflows.
For the fortnight ending July 31, credit demand surged by 19.3%, while deposit growth accelerated to 15.4%, bolstered by considerable Foreign Currency Non-Resident (FCNR(B)) inflows. As of August 13, around $52.3 billion had been mobilized under the FCNR(B) scheme. Although the scheme is set to conclude shortly, projections suggest total mobilization could reach $70 billion by the window’s close, with estimates indicating overall foreign currency mobilization could hit $80–85 billion when including Overseas Foreign Currency Borrowings (OFCBs) and External Commercial Borrowings (ECBs).
The report notes that the Reserve Bank of India (RBI) has already reclaimed approximately $31 billion of foreign currency assets as of August 7, amounting to around 55% of the mobilized funds. The increase in bank deposits and foreign-currency funding is expected to positively impact government securities (G-Sec) yields through enhanced deposit-to-yield transmission.
In terms of market segments, the 3–7-year bonds are likely to benefit the most, given their maturity matching strategy, followed by the 7–10-year bonds. Additionally, a notable turnaround in foreign institutional investor flows has occurred, shifting from previous outflows to inflows, reflecting effective policy measures implemented by the RBI and the government.
The broader corporate landscape appears resilient, with financial performances from 2,257 listed non-Banking Financial Services Institutions (non-BFSI) showing encouraging figures in Q1 FY27. Net sales rose by 24%, EBITDA increased by 9%, and profit after tax (PAT) climbed by 4% compared to Q1 FY26.
Overall, the report emphasizes India’s position as one of the fastest-growing economies globally, supported by robust financial metrics and positive regulatory developments.
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