Archive · 10 Aug 2026
Jefferies: FCNR-B inflows may hit $100 billion, shielding India
Jefferies is a big company that helps people invest their money.
It studies countries to see if their economies are doing well.
Jefferies says India is doing very well right now.
Banks in India are lending more money to people and businesses than they have in over ten years.
A special program by India's central bank, the RBI, lets people deposit foreign money in Indian banks.
This program has already brought in about $41 billion.
Jefferies thinks it could bring in up to $100 billion before it closes.
Foreign investors are also buying Indian government bonds because they no longer have to pay tax on the interest.
This money can help keep India's currency stable against the US dollar.
Jefferies also worries that the US plan to borrow lots of money could shake up world markets.
Global brokerage Jefferies is positive on India, citing bank credit growth of around 17-18% year-on-year, the fastest pace in more than a decade.
The RBI's FCNR-B scheme has mobilised around $41 billion, and Jefferies expects total inflows could reach $80-100 billion before the scheme closes.
Foreign investors brought in $8.7 billion into Indian government bonds after interest income on them was made tax-free in early June.
Foreign investors returned to Indian equities in July with net purchases of roughly $2.45 billion, though they remain net sellers by $25.4 billion for the year so far.
Jefferies warned of US fiscal risks, as the US Treasury plans to borrow $739 billion in the quarter ending September 2026, which could lift Treasury yields.
- Who
- Global brokerage Jefferies, the Reserve Bank of India, and foreign investors.
- What
- Jefferies says strong domestic credit growth and capital inflows, including FCNR-B deposits that may reach $80-100 billion, should shield India's economy from global volatility; it also raises concerns about rising US fiscal risks.
- When
- Report published around July 2026, when foreign investors returned to Indian equities; the FCNR-B scheme is expected to close within the next two months.
- Where
- India and the United States.
- Why
- Rising US fiscal pressures and higher global bond yields could create global market volatility, but Jefferies expects India's credit growth and capital inflows to act as buffers.
- Bank credit growth
- ~17-18% year-on-year, fastest in over a decade
- Corporate lending growth
- ~20% year-on-year
- FCNR-B mobilised so far
- $41 billion
- Expected FCNR-B inflows
- $80-100 billion
- Foreign bond inflows
- $8.7 billion since early June tax change
- July equity net purchases
- $2.45 billion
- Equity net outflows year-to-date
- $25.4 billion
- US Treasury Q3 2026 borrowing
- $739 billion