India’s balance of payments could move back into a small surplus this year instead of posting a third straight annual deficit, according to an HDFC assessment cited in the report. The improved view follows a series of recent measures announced by the Reserve Bank of India and the government.
The policy steps are aimed at drawing in more capital and strengthening the country’s external position. If those inflows materialize, they could help offset external pressures that had weighed on India’s balance of payments outlook in recent periods.
A key part of the expected support appears to come from RBI actions designed to encourage foreign currency deposits. Higher foreign currency inflows can improve the availability of external financing and reduce strain on the broader payments position.
A stronger balance of payments would also be important for the rupee. By improving the flow of funds into the country and reinforcing external stability, the latest RBI and government measures could ease pressure on India’s currency in the near term.
