Context:
Net foreign direct investment (FDI) into India fell sharply to $1.5 billion during April 2024–February 2025, compared to $11.5 billion in the same period the previous year. The decline is attributed to higher repatriation by foreign investors and increased outward FDI by Indian firms.
Gross FDI Remains Strong
- Gross FDI inflows rose 15.2% year-on-year to $75.1 billion during the 11-month period.
- In comparison, the gross FDI inflow was $65.2 billion during April 2023–February 2024, according to RBI data.
Country-wise and Sector-wise FDI Breakdown
- Singapore emerged as the top equity investor, contributing 29.8% of inflows, followed by Mauritius and the United States.
- Manufacturing sector attracted the highest share of FDI (24.1%), followed by financial services and electricity sectors.
Increase in Repatriation and Outward FDI
- Repatriation/disinvestment by foreign investors in India increased to $48.9 billion, up from $40.7 billion a year ago.
- Outward FDI by Indian firms surged to $24.8 billion, compared to $13 billion in the previous year.
Global Investment Shift
- The United States continues to be the top global destination for inward FDI and is now the second-largest destination for Indian ODI.
- The shift in global capital flows is influenced by recent US policy announcements, leading multinationals to redirect investments toward the US.
