Mumbai: Net foreign direct investment (FDI) into India declined sharply by 98% year-on-year to just $35 million in May 2025, according to the latest RBI Bulletin. The steep fall was attributed to increased repatriation by foreign investors and a drop in gross FDI inflows.
The Reserve Bank of India (RBI) noted that over three-fourths of the total FDI inflows in May came from four key countries—Singapore, Mauritius, the United Arab Emirates (UAE), and the United States. In terms of sectors, manufacturing, financial services, and computer services received the highest share of investments.
Conversely, India’s outward FDI was mainly directed toward sectors such as transport, storage and communication, manufacturing, and financial, insurance, and business services. The primary destinations for outward investment were Mauritius, the US, and the UAE.
In contrast to the weak FDI figures, net portfolio investment in May stood at $1.6 billion, reversing the trend of outflows seen during the same month and period last year.
Experts highlighted that FDI is generally considered a more stable and long-term source of foreign capital compared to portfolio flows, which tend to be more volatile.
As of now, India’s foreign exchange (FX) reserves have reached $696.7 billion, offering a robust buffer. At this level, the reserves can cover more than 11 months of goods imports and approximately 95% of the external debt outstanding as of March 2025.
