India received net FDI worth $3.95 billion in April, the highest in 35 months, according to Reserve Bank of India (RBI) data released on Wednesday. The figure more than doubled from the same month last year.
This surge followed net outflows of $438 million in March. Six of the last nine months in FY25 saw net FDI outflows. On a gross basis, April saw $8.80 billion in FDI inflows – a 39-month high and a 23 per cent rise year-on-year.
Net FDI adjusts gross inflows by subtracting repatriated investments by foreign firms and outward FDI by Indian companies. According to RBI economists, manufacturing and business services accounted for nearly half of April’s gross FDI.
Despite strong inflows, foreign investors continued repatriating funds in April. However, the amount fell over 50 per cent year-on-year to $1.67 billion and dropped 36 per cent from March.
Outward FDI by Indian companies remained high at $3.19 billion, a 169 per cent increase from April 2024. Sectors like electricity, gas, water, and financial services led the investments. Top destinations included Singapore, Mauritius, and Germany.
The RBI stated that 2024-25 had seen net FDI of just $2.29 billion, down 77 per cent from $10.13 billion in 2023-24. Repatriation and disinvestment by foreign investors rose 16 per cent in FY25 to $51.49 billion.
Under the RBI’s Liberalised Remittance Scheme (LRS), total outward remittances rose 9 per cent year-on-year in April to $2.48 billion. Travel spending increased 11 per cent to $1.27 billion and remained the largest LRS component.
However, spending on foreign studies dropped 21 per cent year-on-year in April to $164 million. This marked the ninth consecutive monthly decline. Total study-related remittances for January–April 2025 stood at $874 million, also down 21 per cent.
The RBI allows Indian residents to remit up to $250,000 per financial year under the LRS. Eligible purposes include travel, education, treatment, and foreign investments.
The fall in study-related remittances coincides with uncertainty in the US visa process. The Indian Express reported a 38 per cent drop in student visas issued to Indians between January and September 2024.
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