Outward FDI halves Y-o-Y to $1.55 billion in November, shows RBI data

India’s outward foreign direct investment (FDI) commitments fell by 19.6 per cent sequentially to $1.55 billion in November 2023, compared to over $1.93 billion in October 2023.

They halved compared to $3.67 billion in November 2022, according to Reserve Bank of India (RBI) data.

Outbound FDI, expressed as a financial commitment, comprises three components — equity, loans, and guarantees.

A slowdown in economic and business activities world over has impacted direct investment flows, both inbound and outbound. Most investments (outward FDIs) are in subsidiaries or stakes in foreign companies. A slowdown in developed markets means fewer opportunities, according to bankers.

The inward foreign direct investment (FDI) — overseas money flowing as direct investment into India — has also been on downward trail. RBI data showed net FDI in India declined sharply in April-September 2023 to $4.5 billion from $19.6 billion in the same period last year. This is on moderation in global investment activities and a rise in repatriation.

Looking at the components of outbound FDI, equity commitments declined to $729.57 million in November 2023 from $870.37 million in October 2023. It was significantly lower than the $1.69 billion recorded in November 2022.

Debt commitments decreased to $184.96 million in November, down from $250.42 million in October. It was also lower compared to $300.58 million in November 2022.

Guarantees for overseas units declined to $637.26 million in November from $809.26 million in October. They were down substantially compared to $1.68 billion a year ago, RBI data showed.