Net FDI falls 21.1% to $4.91 bn in Q1 FY26 on higher outward flows

Despite strong gross inflows, rising outward investments and repatriation pulled down India's net FDI in April-June 2025

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The net foreign direct investment (FDI) in India, the difference between gross inflows and outflows, declined 21.1 per cent year-on-year (YoY) to $4.91 billion in April-June 2025 period (Q1FY26) from $6.22 billion in April-June 2024, on higher outward investments from the country and repatriation/divestment, the Reserve Bank of India (RBI) data showed.

 

The gross FDI was $25.17 billion in Q1FY26, higher than $22.77 billion a year ago. The central bank has maintained high gross FDI indicating that India continues to remain an attractive investment destination.

 

The outward FDI rose sharply to $7.87 billion in April-June 2025, higher than $4.38 billion in the first quarter of last year (FY25). Outward FDI reflects overseas investments made by Indian entities. 

 

The repatriation/divestment stood at $12.38 billion, up from $12.17 billion in the same period last year. The RBI has argued that the rise in repatriation is a sign of a mature market where foreign investors can enter and exit smoothly.

 

For the month of June 2025, net FDI more than halved to $1.07 billion, compared to $2.24 billion in June 2024.

 

The gross direct investment stood at $9.26 billion against $7.61 billion in June 2024. The gross inward FDI reached a four-year high in June 2025. The US, Cyprus and Singapore together accounted for more than three-fourth of the total FDI inflows. Computer services, manufacturing, and construction were the top recipient sectors, according to the State of the Economy article in the Reserve Bank of India’s bulletin (August 2025).

 

The repatriation/divestment stood at $5.7 billion up from $4.05 billion in June 2024.

 

In June 2025, the outward FDI rose to $2.47 billion from $1.31 billion in June 2024.

 

The top sectors for outward FDI included financial, manufacturing, insurance and business services, and the major destinations were Singapore, the US, the UK and the UAE, it added.