India's BoP Likely to Turn Surplus in FY27: Report

The report added that the capital account surplus could expand from a feeble $2 billion in FY26 to approximately $73 billion in FY27.

The ratings agency also lowered its current account deficit projection for FY27 to 0.8–1.2 per cent of GDP from the previous projection of 2.1 per cent.

The lowering of the CAD projection is mainly because of moderation in crude oil prices and resilience in services exports and remittances, coupled with an improvement in merchandise exports.

"Our revised CAD projection is based on the assumption that crude oil price will average around USD 80-85/bbl in FY27. If global crude oil prices remain lower, the CAD could slip below 1 per cent of GDP," the report said.

The government has enacted several policy steps to attract foreign capital such as expansion of the foreign currency bond universe, tax exemptions for FIIs/FPIs investing in government securities and higher investment limits for NRIs and OCIs.

Some of the debt-market measures also address key hurdles to India’s inclusion in the flagship Bloomberg Global Aggregate Index, the report said, adding that these moves should collectively support foreign portfolio inflows.

Merchandise exports started FY27 strongly, up 15.9 per cent in Q1, with petroleum exports up 35.1 per cent and non‑petroleum exports rising 12.5 per cent.

"We expect this encouraging momentum in merchandise exports to continue going forward. However, the possibility of a higher 12.5 per cent tariff by the US on Indian exports remains a monitorable factor," the agency said.