India's July balance of payments surplus jumps to $20.8 billion on surge in FX inflows

India’s balance of payments recorded a surplus of $20.8 billion in July, compared with a surplus of $0.3 billion a year earlier, driven by a surge in foreign-exchange inflows following the central bank’s measures to attract overseas deposits.

The current account balance for July 2026 stood at a deficit of $7 billion, compared with a deficit of $3.2 billion in July 2025.

Net transfers, which include remittances from Indian workers overseas, rose to $13.2 billion in July from $12.6 billion a year ago.

The capital account, which includes foreign portfolio investments, recorded an inflow of $27.7 billion in July, compared with an inflow of $3.5 billion a year earlier.

In June, India unveiled measures to boost dollar inflows, including discounted hedging for overseas borrowings by state-run firms and banks and free hedging for banks to raise overseas FX deposits.

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The Reserve Bank of India received $136.4 billion under the schemes between June 5 and August 31, including a much higher-than-expected $127 billion from non-resident deposits.

Worries over India’s balance of payments deficit have been a crucial pain point for the rupee in 2026, as the Iran war lifted crude oil prices sharply and caused unabated capital outflows.

Policy measures to boost dollar inflows have prompted analysts to forecast a near-neutral or modest surplus in BoP for the fiscal year ending March 2027.