According to data released by the Reserve Bank of India (RBI) on Monday, Foreign Direct Investment (FDI) into the country reached its highest level in over four years in July. In July, the gross FDI inflow touched its highest mark of $11.11 billion since May 2021, when $12.32 billion came into the country on a gross basis.
Key Highlights from the RBI Data:
- Record Inflows: The July gross FDI of $11.11 billion is the highest since May 2021, when inflows were $12.32 billion. This represents a significant increase from $9.57 billion in June 2025 and more than doubles the $5.54 billion recorded in July 2024.
- Top Investors and Sectors: Singapore was the leading source of FDI, followed by the Netherlands, Mauritius, the US, and the UAE. Together, these five nations contributed over 75% of the total inflows. The primary recipient sectors were manufacturing and services, including communications, computers, and business services.
- Net FDI Surge: On a net basis, FDI was $5.05 billion in July, doubling June’s $2.51 billion and a stark contrast to the net outflow of $2.69 billion in July 2024.
FDI is a clear indicator of the health of the economy and the confidence investors have shown in the country. S&P’s decision on August 14 to upgrade its rating on India to BBB from BBB- is anticipated to boost flows in the medium to long term. The very next day, on August 15, Honourable Prime Minister Narendra Modi announced a set of multiple economic reforms to boost domestic growth. This included Goods and Services Tax (GST) rate cuts that came into effect earlier this week, on Monday.
Inflows have rebounded in the last few months after a disappointing 2024-25, which recorded a net FDI inflow total of just $959 million, despite gross inflows rising to $80.62 billion. This abrupt fall in net FDI in 2024-25, from $ 10.15 billion in 2023-24, came on the back of a sharp increase in overseas FDI made by Indian companies and foreign companies making profits on their investments in India.
In 2024-25, foreign firms took back $51.49 billion to their countries from India, which was 16 percent up from 2023-24. On the other hand, overseas FDI by Indian Companies rose 69 percent to reach #28.17 billion. Both these cases contributed to the net FDI in the last fiscal being negligible.
As of now, in 2025-26, despite factors such as global trade, policy, and financial market uncertainty, the FDI figure is increasing strongly for India. At $10.75 billion, net FDI in the first four months of the fiscal is three times that of the past as compared to the same period the previous year. Gross FDI is up 33 percent at $37.71 billion, while repatriations by foreign companies are down 6 percent at $16.28 billion.
Whereas, the direct investments in abroad by the Indian Companies are up 44 percent at $10.68 billion.
However, RBI noted in its State of the Economy article that in July, both repatriation of FDI and outward FDI figures were in the moderate range. It further added, “Outward FDI was mainly directed towards financial, insurance and business services, as well as manufacturing, with the US, Singapore, the Netherlands, Mauritius, and the UK being the major destinations. These movements together led to an increase in net FDI.”
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