Indian Companies Overseas Investments Rise by 40% to $36 Billion in FY25

Indian firms have increased their overseas investments significantly in FY25. Data from the Reserve Bank of India (RBI) shows that $36 billion was remitted abroad through Overseas Direct Investment (ODI) in the first 11months of the financial year. This marks a 40% increase compared to $25.2 billion in FY24 and $24.8 billion in FY23.

February Records Highest Monthly Outflow

February 2025 recorded the highest monthly ODI outflow in at least 38 months, with Indian companies sending $5.35 billion overseas. This figure includes large corporate transactions, contributing to the overall rise in outflows during the fiscal year.

Top ODI Destinations

Singapore accounted for the largest share of ODI outflows, receiving 23% of the total. Indian firms often use Singapore as an intermediary destination due to its tax treaties with several countries. The United States was the second-largest destination, receiving 16% of total ODI.

While the US saw more individual transactions than Singapore, most of them were small-ticket transfers, typically under $100 million. Companies sending funds to the US were primarily from the services sector, especially information technology.

The United Kingdom and United Arab Emirates followed, accounting for 12% and 10% of the ODI outflows, respectively. Sectors in these regions included manufacturing, logistics, metals, and minerals. Other key destinations included the Netherlands and Mauritius.

Notable Transactions in FY25

Significant transactions during the year included Vedanta’s $1 billion remittance to its Mauritius-based subsidiary THL Zinc in February. Sun Pharma transferred $829 million to its Netherlands arm in December. In October, Biocon Biologics issued guarantees for its joint venture in the UK.

ODI vs LRS

ODI allows companies to send up to $1 billion abroad annually for business purposes. This differs from the Liberalised Remittance Scheme (LRS), which permits individuals to send up to $250,000 abroad each year.

Conclusion

The 40% increase in ODI outflows during FY25 shows a rise in cross-border activity by Indian companies. A mix of large deals and steady sectoral investments contributed to the $36 billion total, with destinations spread across Asia, Europe, and North America.

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