Net foreign direct investment (FDI) inflows in India have declined substantially. In FY 2023-24, net FDI inflows were nearly US$11.5 billion driven by higher repatriation and outward FDI. However, It fell to US$1.4 billion in April-January 2025.
As per the Reserve Bank of India (RBI), gross FDI has remained high. During FY 2023-24, gross FDI inflows were estimated at US$60.2 billion. During April-January 2025, it witnessed a year-on-year growth of 12.4%. It reached US$67.7 billion.
Repatriation/disinvestment increased to US$46.1 billion. This was during the 10 months of FY 2024-25. In FY 2023-24, it was US$36.9. This is according to RBI data. Overseas investments by Indian firms surged sharply. In FY 2023-24, it was US$11.8 billion. From April 2024 to January 2025, outward FDI grew to US$20.2 billion.
As per RBI’s March 2025 bulletin, manufacturing received most of the equity inflows. This sector was followed by manufacturing, electricity and other power sectors. The communication industry also received notable inflows.
In 2024, India was globally ranked at the second position in terms of greenfield FDI projects. This was a notable jump from the 6th position in India. FDI projects worth US$1.8 trillion were under construction globally in 2024. India accounted for a share of 6% of such projects, worth over US$100 billion.
Emerging sectors such as communications, renewables, semiconductors, and metals have become increasingly attractive worldwide.
In India, renewable energy, semiconductors, and metals were the topmost industries. They collectively accounted for around 60% of the total FDI projects which were announced in 2024.
As per the RBI, gross FDI into the Indian economy is rising. However, net FDI is falling, indicating higher outflows. This can be attributed to both increased overseas investment and repatriation. Certain sectors, especially emerging ones, are attracting notable amount of FDI.
India’s FDI landscape reflects a mix of change and growth. While gross inflows remain strong, outward investments, and increased repatriation are adversely impacting net FDI. Key sectors like semiconductors and renewables are getting significant global interest.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Mar 20, 2025, 3:23 PM IST
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