India’s net foreign direct investment (FDI) fell sharply by 96.5% in FY2024–25 to $353 million, down from $10 billion the previous year, according to the Reserve Bank of India (RBI). This marks the lowest net FDI in recent years and is attributed mainly to large-scale capital repatriation by foreign investors following major IPO exits—such as Hyundai and Swiggy—and a surge in outward investments by Indian firms, which reached $29.2 billion during the year.
Despite the drop in net inflows, gross FDI inflows rose 13.7% to $81 billion, reflecting continued foreign interest in sectors like manufacturing, telecom, energy, and financial services, which together received over 60% of total inflows. RBI officials view this as a sign of a maturing investment market, where structured entry and exit are possible.
Economists, however, caution that persistently low net FDI could affect job creation, infrastructure investment, and capital availability. To address this, the government is expected to pursue policy reforms aimed at streamlining regulations, improving investor confidence, and maintaining India’s appeal as a key global investment destination.
