DBS Bank chief executive Tan Su Shan has struck an upbeat note on India's investment outlook, saying overseas demand for foreign currency non-resident, or FCNR(B), deposits points to durable confidence in the economy even as capital outflows and foreign selling continue to pressure the rupee.
Speaking on the sidelines of market discussions, Tan said the appetite for FCNR(B) deposits is a useful signal that global and diaspora investors still see India as a credible destination for savings and long-term capital. Her comments come at a time when currency volatility has kept policymakers and markets focused on the balance between inflows and outflows, with foreign portfolio sales periodically offsetting the country's stronger structural growth story.
Capital Flows Matter
Tan's remarks underscore a familiar tension in India's external accounts: strong domestic growth and improving financial depth are attracting interest, but the rupee remains vulnerable when overseas investors reduce exposure to Indian assets. In that environment, FCNR(B) deposits serve as an important source of foreign currency funding for banks and a proxy for confidence among non-resident Indians and other overseas savers.
Her assessment suggests that the current pressure on the currency should not be read as a verdict on India's fundamentals. Instead, it reflects the mechanics of global capital allocation, where shifts in risk appetite, interest-rate expectations and equity flows can move exchange rates even when the underlying economy remains resilient. For banks, sustained deposit mobilisation from overseas customers can help cushion liquidity needs and support credit growth.
Tan also pointed to India's potential to attract more foreign direct investment, arguing that the country remains well placed to draw long-term capital into manufacturing, services and technology. That view aligns with the broader policy push to deepen India's role in global supply chains and convert its large domestic market into a magnet for strategic investment rather than only portfolio flows.
AI And Digital Edge
A key part of Tan's optimism rests on India's digital infrastructure and its emerging position in the artificial intelligence economy. She said the country has an advantageous base in digital public infrastructure, data connectivity and a large technology workforce, all of which can support innovation and productivity gains.
That matters for investors looking beyond short-term market swings. India's digital rails have already transformed payments, banking access and public-service delivery, and the next phase of growth is increasingly expected to come from AI-enabled services, enterprise software, fintech and industrial automation. For a bank with a strong Asia footprint, that combination of scale, talent and digital readiness makes India a strategic market rather than merely a cyclical opportunity.
Tan's comments also carry significance for the automotive, EV and mobility ecosystem, where foreign capital and technology partnerships are central to scaling battery supply chains, charging infrastructure and software-defined vehicle platforms. As India seeks to expand domestic manufacturing and export capability in these sectors, stable currency conditions and a steady flow of long-term investment will be critical for import-heavy segments such as semiconductors, cells and advanced components.
Policy Support Still Key
Despite her constructive outlook, Tan did not downplay the importance of policy support. She said India must continue promoting foreign direct investment and exports to help stabilise the currency and reduce reliance on volatile portfolio flows. That is a reminder that confidence alone does not solve external imbalances; it must be matched by stronger trade performance and a broader base of durable capital inflows.
Exports remain especially important because they generate foreign exchange earnings that can offset import demand and support the rupee over time. In parallel, a stronger FDI pipeline can anchor investment in factories, logistics, clean mobility and digital infrastructure, all of which have longer gestation periods than market-driven inflows.
For now, Tan's message is one of cautious confidence: India's macro story remains compelling, overseas investors have not turned away, and the country's digital and technological strengths continue to differentiate it. But the rupee's path will still depend on whether that confidence is converted into sustained FDI, stronger exports and a more balanced external account.