With the Budget for 2026–27 around the corner, the Centre is closely tracking movements in foreign exchange reserves, the rupee, foreign portfolio flows and the wider global economic climate — variables that will influence fiscal strategy, market sentiment and growth priorities.
According to the latest RBI Weekly Statistical Supplement (Nov 28, 2025), India’s foreign exchange reserves stand at ₹61.55 lakh crore ($688.1 billion) as of Nov 21. While reserves rose ₹9,281 crore during the week, they remain below earlier highs, reflecting the strain of the RBI’s interventions to contain rupee volatility. Compared with end-March 2025, reserves are up ₹4.43 lakh crore, but the year-on-year increase is a more modest ₹6.09 lakh crore.
Foreign Currency Assets — the largest component — stand at ₹50.15 lakh crore ($560.60 billion), rising by ₹25,216 crore during the week. Gold reserves dipped by ₹16,270 crore, though they remain higher year-on-year due to valuation gains.
The rupee has also remained under pressure, hovering near record lows around the ₹90-per-dollar mark. The currency had hit a low of ₹85.0850 in late 2024, weighed down by a stronger US dollar and expectations of fewer Fed rate cuts. Reduced capital inflows, a wider trade deficit and mixed domestic growth signals have added to the pressure, prompting the RBI to intervene to curb excess volatility.
The quarter saw a positive shift in Foreign Direct Investment, with net FDI inflows rising to $2.9 billion in Q2 versus a net outflow of $2.8 billion a year earlier. In H1 FY26, net FDI more than doubled to $7.7 billion, signalling improving investor sentiment.
However, this has been overshadowed by continued foreign portfolio outflows. FPIs recorded net outflows of $5.7 billion in Q2, compared with $19.9 billion in net inflows last year. In H1 FY26, FPIs saw net outflows of $4.1 billion, reversing inflows of $20.8 billion in the previous fiscal period.
The global backdrop remains uncertain as well. Policies under the renewed Trump administration — including tax reforms, higher government spending and a more aggressive trade stance — have strengthened the dollar and heightened volatility across emerging markets. Geopolitical frictions and shifting supply-chain priorities have further tightened global financial conditions, influencing capital flows into economies like India.
Against this backdrop, Budget FY27 is expected to prioritise stability, investment and resilience. Tax reforms, targeted support for sectors facing external headwinds and measures to strengthen India’s macroeconomic buffers are likely to be in focus.
The government’s challenge will be to craft a budget that reassures global investors, supports domestic demand and shields the economy from a still-fragile global environment — all while staying committed to long-term growth goals.