New Delhi | India's economy is projected to grow at 6.6 per cent in 2026-27 fiscal while a comprehensive package is required on the Balance of Payments (BoP) front amid rupee depreciation and higher oil price, an SBI Research report said on Monday.

The report said the rupee, which has weakened much in the recent period "through clouds on external macros, as also unabated speculative forces" needs structural changes on BoP front, stream lining the guard rails of import substitution, export competitiveness, integration in global value chain.

The rupee has breached the 95-mark against the US dollar that has strengthened due to rising global uncertainties, triggered by the West Asia conflict.

"There is now a felt need to put in place a comprehensive package to address Balance of Payments (BoP)," SBI Research said and made a strong case for diaspora bonds.

With the country's macro fundamental getting distorted as Brent crude prices hover above USD 100, and transport and insurance costs spiking, there is a need to put in place measures that alleviate BoP position, it said.

"...if USD/INR rate (is) at Rs 95, then the economy size will fall to USD 4.04 trillion and the dream to be USD 5 trillion economy may be achieved in the year FY30," the report said.

It also cautioned that the rapid, though infrequently incessant episodes of slide in rupee, coupled with extreme pangs of volatility, may dampen the confidence of investors.

According to the report, a resurgent Indian Diaspora Bond has to be calibrated suitably across corpus, yield, tenor and tax-friendly treatment for investors upon maturity to ensure it does not end in a catch-22 situation.

SBI Research's suggestion also comes against the backdrop of Prime Minister Narendra Modi, on Sunday, highlighting the need to save foreign exchange due to the West Asia crisis as well as judicious use of fuel, postpone purchase of gold and foreign travel for one year.

India is dependent on imports to meet more than 80 per cent of its energy needs.

Meanwhile, SBI Research said the Q4FY26 real GDP growth is expected to be closer to 7.2 per cent and "now casted full year 2026-27 GDP growth rate of 6.6 per cent. FY26 GDP growth is likely to be at 7.5 per cent".

The Reserve Bank of India in the first Monetary Policy Committee meeting of the fiscal projected the GDP growth for FY27 at 6.9 per cent.

The National Statistics Office (NSO) is scheduled to release the provisional estimates of annual GDP for FY2025-26 along with GDP estimates for quarter January-March on May 29, 2026.