India Attracts $73 Billion in 11 Weeks Through Special Diaspora Deposit Program

1-Minute Brief

Large foreign currency inflows are strengthening India's financial position and enabling major investments in government bonds.

Key Facts

• HSBC Holdings Plc has purchased at least $3 billion of Indian government bonds since July, using funds from a diaspora dollar deposit program.
• India has attracted $73 billion in inflows over 11 weeks, primarily from non-resident Indian foreign currency deposits.
• The diaspora deposit program has provided a significant pool of funds for investment in Indian assets.
• Cholamandalam Investment and Finance Co. plans to raise up to 20 billion rupees ($209 million) via perpetual bonds, the largest such sale by a non-bank in India.
• HDFC Securities CEO Dhiraj Relli expects the FCNR(B) deposit scheme to raise an additional $12 billion, citing strong diaspora support.

What Happened

India has seen substantial foreign currency inflows through a special deposit program for non-resident Indians, leading to significant investments in government bonds and new debt issuances.

Why It Matters

These inflows can help stabilize India's currency, support government financing, and encourage further investment activity in the country's financial markets.

What's Next

Market participants are watching for continued inflows from diaspora deposit schemes and the impact on bond markets and private debt issuance.