Direct impact: Foreign investment dynamics must be studied carefully

In the normal course, repatriation by foreign multinationals and overseas investment by Indian corporations should not be cause for concern for a large and open economy like India

Foreign direct investment (FDI) numbers for 2024-25 have attracted significant public and policy attention. While at gross level India attracted $81 billion during the year, at net level it translated into only $0.35 billion, the lowest in the past two decades. The low level of net FDI was driven by significantly higher repatriation and disinvestment by foreign firms, along with increased outbound investment by Indian corporations. Last financial year, foreign firms repatriated over $51 billion. Meanwhile, outward investment by Indian corporations increased about 75 per cent compared to the previous year to $29.2 billion. As a consequence, at net level,