Overview: India’s net FDI moved up to US$ 7.3 billion in July 2026, the highest monthly level in five years, according to the Reserve Bank of India (RBI). Gross FDI inflows reached US$ 14.6 billion, while communication, financial and computer services accounted for more than 80 per cent of equity inflows. Mauritius, the UAE and the United States were the major source countries.
India’s net FDI increased to US$ 7.3 billion in July 2026, while gross FDI inflows stood at US$ 14.6 billion. Foreign investment flows have strengthened as both net and gross FDI increased during the month. The latest figures are relevant for businesses seeking foreign capital as well as overseas investors looking to establish or expand their presence in India.
India’s Net FDI Rises Sharply in July 2026
The RBI data showed strong equity inflows into communication, financial and computer services, which together accounted for more than four-fifths of equity inflows. Mauritius, the UAE and the United States accounted for around 70% of equity inflows.
The improvement was also visible during the first four months of FY 2026-27. Net FDI reached US$ 13.4 billion during April-July, compared with US$ 9.7 billion in the corresponding period a year earlier. Gross FDI inflows increased to US$ 43.9 billion from US$ 38.9 billion.
Indian companies also increased their overseas investment activity in July after two consecutive months of decline. Outward FDI rose to around US$ 3.4 billion, with Singapore, the UK and the UAE accounting for more than 66% of the flows. Financial, insurance and business services, along with manufacturing, accounted for about two-thirds of outward FDI.
FDI Compliance Remains Important for Businesses
Higher FDI inflows do not change the compliance requirements applicable to individual transactions. Businesses receiving foreign investment should assess:
- FDI route and sectoral cap applicable to the proposed activity
- Whether Automatic or Government approval is required
- FEMA and ownership conditions
- Pricing and valuation requirements
- Beneficial ownership requirements, where applicable
- Prescribed investment documentation and regulatory reporting
The concentration of inflows in communication, financial and computer services is relevant for businesses operating in these areas. However, the applicable foreign investment limit, entry route and conditions depend on the specific sector and activity.
Indian companies making eligible investments outside India must separately comply with the Overseas Direct Investment (ODI) framework, including applicable requirements relating to the investment structure, permitted activities, financial commitments, reporting and documentation. Learn more about ODI compliance.
It is also important to distinguish between gross FDI inflows and net FDI. Gross FDI reflects foreign investment entering India, while net FDI takes into account factors such as repatriation/disinvestment and outward direct investment.
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SetIndiaBiz supports foreign investors and Indian businesses with FDI structuring, FEMA compliance, regulatory documentation and company incorporation. Our experts can help in assessing the applicable FDI route and sectoral cap, ownership conditions, approval requirements, valuation and pricing requirements, FEMA reporting and post-investment compliance.
For foreign investors entering India, SetIndiaBiz also assists with company incorporation for foreign investors and India entry services. For Indian businesses expanding overseas, support is also available for eligible ODI structuring and FEMA compliance.
FAQs
What was India’s net FDI in July 2026?
India’s net FDI stood at approximately US$ 7.3 billion in July 2026, the highest monthly level in five years. Gross FDI inflows during the month were around US$ 14.6 billion.
Which sectors attracted the largest FDI equity inflows?
Communication, financial and computer services together accounted for more than four-fifths of equity inflows in July 2026. Mauritius, the UAE and the United States were the major source countries.
What should a company receiving FDI in India check?
The company should assess the applicable FDI route, sectoral cap, approval requirements, ownership conditions, pricing and valuation rules, FEMA requirements and prescribed reporting obligations.
What is the difference between gross and net FDI?
Gross FDI represents foreign investment inflows into India. Net FDI also takes account of outflows such as repatriation/disinvestment and outward direct investment, providing a measure of the net flow of direct investment.
India’s net FDI of US$ 7.3 billion in July 2026 marks its highest monthly level in five years. Stronger gross inflows were accompanied by increased investment in communication, financial and computer services. For businesses involved in cross-border investment, understanding the applicable FDI, FEMA and sector-specific requirements remains important alongside the investment opportunity.
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Author Bio
Setindiabiz Editorial Team is a multidisciplinary collective of Chartered Accountants, Company Secretaries, and Advocates offering authoritative insights on India’s regulatory and business landscape. With decades of experience in compliance, taxation, and advisory, they empower entrepreneurs and enterprises to make informed decisions.
