Archive · 25 Sep 2026
India’s Balance of Payments Pressure Expected to Persist, Advisor Warns
India receives and spends money through trade and investment with other countries.
Its balance of payments may remain under pressure because imports are rising and global borrowing costs are high.
Countries and companies are also competing more intensely for investment money.
A Reserve Bank of India currency-swap program gives India extra breathing room for now.
However, the chief economic advisor said the program cannot solve the problem permanently.
He said India needs both manufacturing and services, along with more exports and foreign investment.
He also identified uncertainty involving the United States, energy supplies, and artificial intelligence investment as near-term challenges.
India should use AI to create jobs while preparing younger workers for changes in employment.
Chief Economic Advisor V Anantha Nageswaran said India’s balance of payments pressures will remain a continuing challenge.
The Reserve Bank of India’s concessional forex swap window offers near-term relief but is not a lasting solution.
Swap-window inflows reached $143.5 billion by September 18, with nearly $133 billion coming from FCNR(B) deposits.
India is projected to record a $100 billion balance of payments surplus in FY27, compared with a $23 billion deficit in FY26.
Nageswaran urged stronger manufacturing, foreign investment, investor protections, and AI-linked job creation to improve resilience.
- Who
- V Anantha Nageswaran, India’s chief economic advisor, and the Reserve Bank of India.
- What
- Nageswaran warned that India’s balance of payments pressures will persist despite short-term support from the RBI’s concessional forex swap window.
- When
- The remarks were made on Thursday; the RBI reported swap-window inflows as of September 18.
- Where
- At the State Bank of India Banking & Economics Conclave 2026 in Mumbai.
- Why
- Rising imports, dependence on key commodities, higher global interest rates, and intensified competition for capital are weighing on India’s external account.
- Swap-window inflows
- More than $143.5 billion as of September 18.
- FCNR(B) inflows
- Nearly $133 billion, forming the bulk of swap-window inflows.
- Projected FY27 balance
- A $100 billion overall balance of payments surplus.
- FY26 balance
- A $23 billion balance of payments deficit.
- Goods trade deficit
- Between 3.5% and 4% of GDP excluding oil and gold.
- Key near-term headwinds
- An unsettled relationship with the United States, energy-supply uncertainty, and limited participation in capital-intensive AI hyperscaler investment.