MUMBAI: Net foreign direct investment (FDI) into India rose sharply to $7.65 billion in the 2025-26 financial year, according to Reserve Bank of India (RBI) data, with March marking the second consecutive month of positive net inflows at $1.57 billion. Net FDI stood at $959 million in 2024-25.
“During 2025-26, FDI inflows were higher than the previous year, both in gross and net terms. In March, net FDI remained positive for the second consecutive month, though gross inward FDI registered deceleration. Outward FDI declined in March, with more than half of the flows directed to Singapore, the UAE, and the Netherlands,” RBI said.
Net FDI turned positive in February 2026 after remaining in negative territory for six consecutive months. Net inflows stood at $4.44 billion in February. In March, net FDI inflows of $1.57 billion reversed an outflow of $502 million recorded a year earlier, although they were lower than the February level.
Gross inward direct investment into India rose to $40.95 billion in 2025-26 from $29.13 billion a year earlier, supported by higher equity inflows and reinvested earnings. Gross inflows increased to $94.53 billion during the year from $80.62 billion previously.
Equity inflows rose to $62.28 billion from $50.99 billion, driven mainly by investments routed through the RBI channel, which increased to $43.19 billion from $34.69 billion.
Reinvested earnings increased to $25.56 billion from $22.76 billion, while acquisition of shares rose marginally to $13.79 billion.
Repatriation and disinvestment by foreign investors, however, remained elevated at $53.58 billion in 2025-26, compared with $51.49 billion in the previous year, limiting the rise in net FDI.
Direct investment abroad by Indian companies rose to $33.29 billion during the year from $28.17 billion previously, led by higher equity capital and other capital outflows.
India’s portfolio investment flows weakened sharply during the fiscal year. Net portfolio investment recorded an outflow of $16.67 billion in 2025-26, compared with an inflow of $3.56 billion a year earlier, primarily due to foreign portfolio investor (FPI) outflows of $15.50 billion.
In March alone, net portfolio investment recorded an outflow of $13.34 billion, driven by FPI withdrawals of $13.10 billion.
Overall foreign investment inflows, including both direct and portfolio investment, recorded a net outflow of $9.02 billion in 2025-26, compared with an inflow of $4.52 billion in the previous year.
Source: Business Standard
