Rising Investment By Indian Inc Aboard Drags Net FDI Numbers

New Delhi, Apr 25 (KNN) India's net foreign direct investment (FDI) has fallen dramatically to USD 1.5 billion during April 2024-February 2025, down from USD 11.5 billion in the corresponding period last year, according to Reserve Bank of India (RBI) data. This sharp decline comes despite robust growth in gross FDI inflows.

The country's gross FDI inflows showed impressive growth of 15.2 percent year-on-year, reaching USD 75.1 billion during the 11-month period of FY 2024-25, up from USD 65.2 billion in the previous fiscal year.

The State of the Economy report in the April 2025 RBI bulletin identified Singapore as the largest source of equity inflows with a 29.8 percent share, followed by Mauritius and the United States.

The manufacturing sector attracted the highest proportion of FDI inflows at 24.1 percent, with financial services and electricity following as the next most popular sectors for foreign investment in India.

The net FDI decline can be attributed to two key factors: increased repatriation and rising outward investment.

Repatriation and disinvestment by foreign investors in India climbed to USD 48.9 billion during the period, compared to USD 40.7 billion in the same period of the previous fiscal year.

Meanwhile, overseas investments by Indian firms surged significantly to USD 24.8 billion from April 2024 to February 2025, nearly doubling from USD 13 billion in the corresponding period a year earlier.

Globally, the United States continues to be the most attractive destination for inward FDI and ranks as the second most popular destination for overseas direct investment from India in recent years.

The report noted that multinational corporations have been increasingly redirecting their investment plans toward the US, influenced by recent policy announcements there.

(KNN Bureau)