Daijiworld Media Network - New Delhi

New Delhi, Apr 8: Remittances to India are projected to reach an all-time high of $137–140 billion in FY26 before slightly moderating to $135–137 billion in FY27, according to a report by SBI Research released on Wednesday.

The report noted that ongoing tensions in West Asia could influence remittance flows, while also highlighting the potential of retail participation in debt markets. It suggested that enabling full dematerialisation of Retail Direct holdings could improve interoperability and attract greater interest from individual investors.

Analysing the recent policy statement by the Reserve Bank of India, the report described the tone as one of the most cautious in recent times. However, it clarified that the language did not indicate any immediate move towards a rate hike, instead reflecting a careful balancing of growth and inflation concerns in a complex global environment.

The report also pointed out that the recent depreciation of the Indian rupee was not aligned with the country’s macroeconomic fundamentals, suggesting that a correction was necessary and that the currency is now moving closer to its fair value.

On the liquidity front, the RBI has infused approximately Rs. 4.6 lakh crore into the system since its February policy review. This includes open market operations worth Rs. 1 lakh crore and variable rate repo operations totalling Rs. 3.6 lakh crore across different tenures.

The central bank has projected average inflation at 4.6 per cent for FY27, with core inflation estimated at 4.4 per cent. Economic growth is expected to remain steady, with real GDP projected at 6.9 per cent, supported by improvements in the latter half of the fiscal year.

However, the report cautioned that fluctuations in crude oil and commodity prices, along with potential El Niño conditions, could introduce volatility in inflation. At the same time, a strong rabi crop is expected to support food supply in the near term, offering some relief on price pressures.