Context:
The Reserve Bank of India (RBI) in its July 2025 bulletin reported a 98.2% decline in net foreign direct investment (FDI) in May 2025 compared to the same month last year.
Net Foreign Direct Investment (FDI)
Net FDI refers to the difference between total foreign direct investment inflows and outflows over a specific period.
- Formula:
- Net FDI = Gross FDI Inflows – Gross FDI Outflows
Components:
Gross FDI Inflows:
- Total foreign investment into the country.
- Includes:
- Equity capital
- Reinvested earnings
- Other long-term capital
Gross FDI Outflows:
- Total investment made by domestic entities abroad.
Top FDI Source Countries
- Singapore
- Mauritius
- UAE
- United States
(accounted for over 75% of total inflows)
Top Recipient Sectors
- Manufacturing
- Financial Services
- Computer Services
Top Destinations for Outward FDI
- Mauritius
- United States
- UAE
