According to the Reserve Bank of India's (RBI) April 2026 Bulletin, India's financial system and external sector indicators are resilient despite global volatility and capital outflows driven by ongoing geopolitical tensions in West Asia. The Bulletin reports that foreign exchange reserves are robust at $697.1 billion, providing approximately 11 months of import cover, indicating stability amid global uncertainties. The RBI highlights strong growth in gross foreign direct investment (FDI) and improved net FDI, showcasing India's attractiveness for greenfield projects. However, foreign portfolio investment (FPI) has turned volatile, with net outflows reflecting a global risk aversion. On the domestic front, the banking system remains strong, characterized by healthy capital adequacy, liquidity, and asset quality. Credit growth is also robust, supporting economic activity. The RBI noted that liquidity conditions improved in April, easing pressures seen in March. While acknowledging ongoing global uncertainties, the RBI emphasizes that India's strong macroeconomic fundamentals and policy measures are crucial in mitigating potential adverse impacts.