According to the latest data from the Reserve Bank of India (RBI), net foreign direct investment (FDI) in India surged to $6.9 billion during the April-June quarter of FY25, compared to $4.7 billion in the same period last year. This increase was driven by a significant rise in gross inward FDI, which grew by 26.4% year-on-year (Y-o-Y) to reach $22.5 billion. Key sectors such as manufacturing, financial services, communication services, computer services, and energy accounted for about 80% of the total inflows.
Key Drivers of Growth
Sectoral Contribution:
The primary sectors contributing to the rise in gross FDI inflows included manufacturing, financial services, communication services, computer services, and electricity and other energy sectors, which collectively made up about 80% of the total inflows.
Major Source Countries:
Approximately 75% of the FDI flows originated from five key countries: Singapore, Mauritius, the Netherlands, the US, and Belgium.
Comparative Analysis
Year-on-Year Growth:
The first quarter of FY25 saw a significant improvement in net FDI, rising to $6.9 billion from $4.7 billion in Q1 FY24, largely due to increased gross inward FDI.
Annual Decline in Net FDI:
Despite the quarterly rise, net FDI for FY24 dropped sharply to $9.8 billion, down from $28 billion in the previous year, and significantly lower than the $38.6 billion recorded in FY22.
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