India's external account is facing significant challenges as both the current and capital accounts come under pressure. The current account deficit is anticipated to widen, while the capital account may experience substantial outflows. Over the past year, the Indian rupee has depreciated by approximately 11%, with a nearly 5% drop since the escalation of the US-Iran conflict. In response to this economic strain, the Reserve Bank of India (RBI) may consider a range of measures to stabilize the currency, including reopening a currency swap window for oil marketing companies (OMCs) and offering incentives for Foreign Currency Non-Resident (FCNR) deposits. Radhika Rao, Executive Director at DBS Bank, highlighted that policy actions beyond conventional interest rate hikes will be crucial, such as removing withholding tax for foreign investors in sovereign bonds and encouraging state-owned banks to issue foreign currency bonds. The pressure on the balance of payments (BoP) is not only due to the widening current account deficit but also the declining capital account surplus, indicating a need for proactive policy measures to attract foreign investment and stabilize the rupee.