Indian diaspora deposits near $100 billion as RBI window closes early

New Delhi: The Indian diaspora has poured nearly $100 billion into India through a special overseas deposit facility operated by the Reserve Bank of India (RBI), reflecting growing confidence in the country’s investment prospects as India targets developed-nation status by 2047.

Officials were quoted in media reports on Tuesday as saying inflows under the Foreign Currency Non-Resident (FCNR) deposit facility have approached the $100 billion mark. The figure would represent a substantial increase from the RBI’s last official tally of $65.39 billion and is also higher than the approximately $80 billion estimated earlier by RBI Governor Sanjay Malhotra.

The strong inflows prompted the central bank to advance the closure of the special deposit window to August 31 from the originally scheduled end-September date. Malhotra had attributed the decision to stronger-than-expected inflows under the programme.

The surge in foreign-currency deposits has also contributed to India’s foreign exchange reserves reaching a record $729.3 billion, strengthening the country’s external position.

The additional foreign-currency buffer provides the RBI with greater capacity to intervene in the foreign exchange market and support the Indian rupee, which remains under pressure from elevated crude oil prices.

The inflows could also help India avoid a third consecutive year of a deficit in its broadest measure of cross-border money flows, underscoring the growing role of overseas Indians in supporting the country’s external finances.