India’s Net FDI Declines to $1.4 Billion in 2024-25 Amid Rising Outward Investments

India’s net Foreign Direct Investment (FDI) witnessed a significant decline, dropping to $1.4 billion during April 2024–January 2025 from $11.5 billion in the same period a year ago. This decline was attributed to increased repatriation by investors and a rise in outward FDI by Indian firms. However, gross FDI remained strong, growing 12.4% year-on-year (Y-o-Y) to $67.7 billion. The latest data was published in the March 2025 bulletin of the Reserve Bank of India (RBI).

India’s Net FDI Decline: An Overview

Despite a surge in gross FDI inflows, India’s net FDI plummeted due to higher disinvestment and increased outward investments by Indian businesses.

• Net FDI: Decreased from $11.5 billion (April 2023–January 2024) to $1.4 billion (April 2024–January 2025).
• Gross FDI: Increased by 12.4% to $67.7 billion.
• Repatriation/Disinvestment: Jumped to $46.1 billion from $36.9 billion a year ago.
• Outward FDI (by Indian firms): Increased sharply to $20.2 billion from $11.8 billion.

This surge in capital outflow highlights a shift in investment trends, where Indian firms are actively investing abroad, leading to a net FDI decline.

Sectoral Breakdown: Which Industries Attracted the Most FDI?

The State of the Economy report by the RBI revealed that the manufacturing sector received the highest equity inflows during the period. Other top sectors included:

• Financial services
• Electricity and other energy sectors
• Communication services

The focus of foreign investors on manufacturing, financial services, and infrastructure sectors aligns with India’s long-term economic growth strategy.

Top Investing Countries: Who Are the Major Players?

Over 75% of total FDI in India came from the following five countries:

• Singapore
• Mauritius
• United States (US)
• United Arab Emirates (UAE)
• Netherlands

These nations have consistently remained India’s top foreign investors, reflecting their long-term interest in India’s economic potential.

India’s Global FDI Ranking: Second in Greenfield Investments

India made remarkable progress in attracting greenfield FDI projects—new investments in fresh business infrastructure.

• India ranked second globally in announced greenfield FDI projects in 2024, just behind the United States.
• This is a significant jump from its sixth position in 2020.
• Out of $1.8 trillion worth of global greenfield FDI projects, India accounted for over $100 billion (approximately 6% of total global FDI).

This rise in greenfield investments underscores India’s growing appeal as an investment destination.

Emerging Sectors: Where is the Investment Flowing?

Globally, the most attractive FDI sectors in 2024 were:

• Renewable energy
• Communication services
• Semiconductors
• Metals

In India, the top three industries attracting FDI were:

• Metals
• Renewable energy
• Semiconductors

These three sectors alone accounted for 60% of total FDI projects announced in 2024. India’s renewable energy sector and semiconductor industry have gained significant traction, aligning with the government’s vision of self-reliance and sustainability.

Summary Table: India’s FDI Trends (April 2024 – January 2025)

Parameter	2024-25 (April–Jan)	2023-24 (April–Jan)	Change
Net FDI	$1.4 billion	$11.5 billion	Declined
Gross FDI	$67.7 billion	$60.2 billion	Increased
Repatriation/Disinvestment	$46.1 billion	$36.9 billion	Increased
Outward FDI (Indian firms)	$20.2 billion	$11.8 billion	Increased
Top Sectors	Manufacturing, Financial Services, Energy, Communication	–	–
Top Investing Countries	Singapore, Mauritius, US, UAE, Netherlands	–	–
India’s Greenfield FDI Rank	2nd globally (after US)	6th in 2020	Improved
India’s Share in Global Greenfield FDI	6% (over $100 billion)	–	–
Emerging Investment Sectors	Metals, Renewable Energy, Semiconductors	–	–