Net foreign direct investment (FDI) in India surged to $6.2 billion during April‑October, nearly doubling from $3.3 billion the previous year. The increase was mainly attributed to a decrease in repatriation of foreign capital despite a rise in outward FDI, as per an official statement.
According to the RBI’s December Monthly Bulletin, gross inward FDI saw a slight increase to $58.3 billion in April‑October from $50.5 billion a year ago. In October, the inflows remained stable, with Singapore, Mauritius, and the United States contributing to over 70% of the total inflows.
During the same period, repatriation of foreign capital from India decreased to $31.65 billion from $33.2 billion, while outward FDI rose to $20.5 billion from $14.06 billion. The financial sector attracted the highest share of FDI at 60%, followed by manufacturing, electricity, and communication services, the statement highlighted.
The report pointed out that the primary destinations for outward FDI were Singapore, the US, and the United Arab Emirates, accounting for more than half of the total outward FDI. Sector-wise, around 90% of outward FDI was in financial, insurance, and business services, with wholesale, retail trade, and manufacturing following suit.
In October, net FDI in India turned negative at -$1.5 billion, primarily due to increased repatriation and outward FDI. Repatriation in October amounted to nearly $5 billion, while outward FDI surged to $3.90 billion. The rupee depreciated against the US dollar in November, influenced by a strong dollar, subdued foreign portfolio flows, and uncertainties related to the India-US trade deal.
The RBI’s analysis for November indicated that economic activity remained robust, with services showing strong expansion and manufacturing displaying signs of slowing down. Despite sustained private consumption growth driven by rural demand and easing inflation, net exports continued to weigh on overall growth.
