Net Foreign Investment Into India Shows Sharp Uptick In First Seven Months Of FY

Net foreign direct investment (FDI) into India almost doubled to $6.2 billion during the April–October period of the current financial year, compared with $3.3 billion in the same period last year, according to the Reserve Bank of India’s latest data.

Lower repatriation of funds largely drove the improvement, even as Indian firms increased their outward investments.

The RBI’s Monthly Bulletin showed that gross inward FDI rose marginally to $58.3 billion in the first seven months of the financial year, up from $50.5 billion a year earlier.

Inflows remained stable in October, with Singapore, Mauritius and the United States together contributing more than 70 per cent of total foreign investments into the country.

Despite global economic uncertainties, overall FDI inflows stayed higher than last year in both gross and net terms, indicating continued investor confidence in India’s medium-term growth prospects.

During April–October, repatriation of FDI declined to $31.65 billion from $33.2 billion in the corresponding period last year.

At the same time, outward FDI rose sharply to $20.5 billion from $14.06 billion, reflecting Indian companies’ growing overseas investment activity.

The RBI noted that more than 60 per cent of inward FDI during the period flowed into financial services, followed by manufacturing, electricity and communication services.

October Sees Net Outflow

However, net FDI turned negative in October due to elevated repatriation and a surge in outward investments.

Repatriation stood at nearly $5 billion during the month, slightly lower than $5.4 billion a year earlier, while outward FDI jumped to $3.90 billion from $1.89 billion in October last year.

According to the RBI’s ‘State of the Economy’ report, Singapore emerged as the leading destination for outward FDI, followed by the United States and the United Arab Emirates. Together, these three countries accounted for more than half of the total overseas investments by Indian firms.

Sector-wise data indicated that nearly 90 per cent of outward FDI was directed towards financial, insurance and business services. Wholesale and retail trade, along with manufacturing, accounted for the bulk of the remaining overseas investments.

Economists say the sharp rise in net FDI during the April–October period underscores India’s attractiveness as an investment destination, even as higher outward investments and month-to-month volatility continue to influence headline numbers.

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