India recorded a net foreign direct investment (FDI) inflow of $10.1 billion between April and August 2025, marking a significant increase from $4.6 billion during the same period last year, according to data released by the Reserve Bank of India (RBI).
The surge in net FDI reflects growing investor confidence in India’s economic prospects, particularly in sectors such as manufacturing, digital infrastructure, and renewable energy. Gross FDI inflows during the April–August period stood at $43.8 billion, up from $37 billion a year earlier, registering a growth of 18.3%. This rise was partially offset by repatriation and disinvestment figures, which totaled $21.2 billion, slightly lower than the $22.6 billion recorded in the previous year.
However, FDI outflows—which include Indian investments abroad—also saw an uptick, reaching $12.4 billion compared to $9.9 billion in the same period last year. This indicates a simultaneous expansion of Indian businesses into global markets, even as inbound investments continue to grow.
The RBI’s broader data for FY 2024–25 shows gross FDI inflows at $80.6 billion, a 14% increase from $71.3 billion in FY 2023–24. Key source countries contributing to this inflow include Singapore, Mauritius, the UAE, the Netherlands, and the United States, which together accounted for more than 75% of total FDI.
Despite the positive trend in the first five months, analysts caution that net FDI for the full fiscal year may moderate, citing rising outward investments and capital repatriation pressures. The RBI’s May bulletin had already flagged a sharp decline in net FDI to $0.4 billion for the full fiscal year, driven by increased disinvestment and overseas expansion by Indian firms.
The government continues to focus on policy reforms, ease of doing business, and sector-specific incentives to sustain FDI momentum. With global economic uncertainties and geopolitical shifts, India’s ability to maintain investor interest will be crucial in the coming quarters.
