India central bank to transfer $29.9 bn to government amid war shock

AFP | Mumbai

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India’s central bank said yesterday it approved a record 2.86 trillion rupee ($29.9 billion) payout to the government to help bolster New Delhi’s coffers at a time when public finances are strained due to high global oil prices.

The Reserve Bank of India (RBI) said its board had greenlit the “transfer of surplus” after taking into account current macroeconomic factors, its own financial performance and the “maintenance of appropriate risk buffers”.

The RBI makes annual transfers to the government that are based on surplus income it generates from its own investments and activities like the printing of banknotes and minting of coins. The payout for the 2025-26 financial year is higher than the 2.69 trillion rupees transferred last year, but missed the average analyst estimate of around 3 trillion rupees.

As the world’s third-largest buyer of oil, New Delhi normally sources about half of its crude through the Strait of Hormuz, which has been effectively blocked by Iran since the beginning of the Middle East conflict on February 28. Rising fertiliser prices -- a portion of global urea exports pass through Hormuz -- could also add to New Delhi’s farmer subsidy bill, throwing a wrench into the budget calculations of Prime Minister Narendra Modi’s government.