India's net FDI inflow drops 96% in 2024-25 amid high capital repatriation and overseas investment
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India witnessed a dramatic 96% decline in net foreign direct investment (FDI) during the financial year 2024-25, according to data published in the Reserve Bank of India’s (RBI) latest monthly bulletin.
The net inflow dropped sharply to $353 million, compared to $10.1 billion in 2023-24 and $28 billion in 2022-23.
Net FDI represents the balance between incoming foreign investments and the capital withdrawn by foreign companies operating in India or Indian firms investing abroad.
The RBI attributed the steep fall to two primary factors: a surge in outbound investments by Indian companies and a significant uptick in capital repatriation by foreign businesses. “This is a sign of a mature market where foreign investors can enter and exit smoothly, which reflects positively on the Indian economy,” the central bank said.
The data shows that repatriation and disinvestment by foreign entities reached $51.5 billion in 2024-25 — the highest level in nearly a decade — up from $44.5 billion in the previous year.
Despite the drop in net FDI, gross FDI, which measures the total capital invested by foreign entities into India’s productive sectors, rose to $81 billion in 2024-25. This marks an increase from $71.3 billion in 2023-24 and $71.4 billion in 2022-23.
The RBI noted that over 60% of gross FDI remained concentrated in key sectors such as manufacturing, financial services, electricity and energy, and communication services.
In terms of source countries, Singapore, Mauritius, the United Arab Emirates, the Netherlands, and the United States accounted for more than 75% of the total FDI inflows during the financial year.
Meanwhile, outward FDI — investments made by Indian companies abroad — also saw a notable rise, climbing to $29.2 billion from $16.7 billion in 2023-24 and $14 billion in 2022-23.
