Volatility has surged since June 30, as part of a surge in Indian rupee-US dollar over global risk aversion.
HSBC says increased recent volatility a reminder of potential risks to the currency.
Despite compression in the current account deficit, India still dependent on capital inflows, HSBC says.
RBI Governor Raghuram Rajan warned on Wednesday of the prospect of a global market "crash" should investors bail out of riskier assets. Updates: Indian rupee vs US dollar, others