FCNR Deposits Explained: Can RBI’s Big Move Bring $50 Billion To India?

India's latest measures to attract foreign currency inflows through FCNR deposits have reignited a debate on the effectiveness of such steps in strengthening the economy. Speaking on the issue, Mythili Bhusnurmath, Senior Journalist & Former Editor, Financial Express, cautioned against placing excessive faith in estimates that project $30-50 billion of inflows. Drawing parallels with past experiences, she highlighted how macroeconomic forecasts can often miss the mark, especially amid global uncertainty driven by geopolitical tensions and policy shifts. Bhusnurmath stressed that policymakers should focus not only on the volume of inflows but also on their quality. The key question remains whether these are stable, long-term funds or short-term "hot money" flows that can quickly reverse during periods of market volatility.