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India's Net FDI Drops 96.5% to $0.4 Billion Despite Record Gross Inflows

The Reserve Bank of India attributes the decline to increased repatriation and outward investments, while Congress raises concerns over investment uncertainty.

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Overview

  • Net Foreign Direct Investment (FDI) in India fell sharply to $0.4 billion in FY2024-2025, a 96.5% decrease from the previous year's $10.1 billion.
  • Gross FDI inflows, however, rose by 13.6% to a record $81 billion, reflecting sustained foreign investor confidence in India's economy.
  • The Reserve Bank of India views the decline in net FDI as a sign of a mature economy, citing smoother entry and exit for foreign investors.
  • Outward FDI by Indian companies surged by 74.8% to $29.2 billion, with major investments directed toward markets like Singapore, the US, and UAE.
  • The Congress party criticized the drop in net FDI, arguing it highlights investment uncertainty and a preference among businesses to invest abroad.