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India’s Net FDI Plummets 96% in FY25 Despite Record Gross Inflows

RBI attributes the sharp decline in net foreign direct investment to record repatriation and rising outbound investments, reflecting a maturing financial market.

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Overview

  • Net FDI into India fell to a record low of $0.4 billion in FY25, down from $10.1 billion in FY24, marking a 96% decline.
  • Gross FDI inflows grew by 13.7% year-on-year to $81 billion, concentrated in manufacturing, financial services, energy, and communications sectors.
  • Repatriation by foreign investors reached a record $49 billion, up from $41 billion in the previous fiscal year, driven by exits in IPOs and stake sales.
  • Indian firms expanded their global presence, with outward direct investments rising to $29 billion from $17 billion a year earlier.
  • The Reserve Bank of India framed the trends as indicative of a mature market, emphasizing India’s role as a key intermediary in strategic global sectors.