Mumbai: Net inflows from Non-Resident Indians (NRIs) into India dropped sharply in the first half of the current financial year, according to the Reserve Bank of India (RBI). Between April and September 2025, fresh NRI deposits amounted to $6.1 billion, marking a 40% decline from $10.2 billion recorded during the same period in FY25.

The decline was most pronounced in Foreign Currency Non-Resident (Bank) [FCNR(B)] deposits, which fell 87% year-on-year in the first half of FY26 (April 1,2025-March 31, 2025). July and August, in particular, saw NRIs withdrawing funds from these accounts rather than adding to them.

NRI deposits in India consisted of FCNR(B) deposits in foreign currency and rupee-denominated deposits, including Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts. While fresh FCNR(B) inflows dropped sharply, NRE and NRO deposits remained largely stable, supported by a weakening rupee, which declined 4.5% in 2025.

Analysts attribute the slowdown in incremental deposits to a combination of narrowing interest-rate differentials between India and global markets and a shift of capital by NRIs into stock markets. A major share of NRI deposits into India originates from the United States. With India cutting rates due to easing inflation, while the US continues to experience persistent inflation and policy uncertainties, many NRIs appear to be reallocating funds abroad.

It is observed that some NRIs are now investing more in Indian equities rather than holding deposits.

As of September 2025, total NRI deposits stood at $165.9 billion, a marginal increase of around 3% from $161.6 billion in September 2024. It is observed that reduced interest-rate gaps with the US and slower income growth among expatriates in Western economies are key factors influencing incremental NRI inflows.