In April 2025, India received an inflow of $8.8 billion in foreign direct investment (FDI), representing a 22% increase from the same period last year. This rise is part of the Reserve Bank of India's routine of consolidating foreign exchange reserves to maintain the rupee's stability. An increase in FDI also indicates that investors remain interested in the significant sectors of the Indian economy.
The Gross FDI inflow has been as much as 81 billion in FY25 to date, which is better than the previous financial year, which was 71.3 billion. The net FDI, however, dropped to 0.4 billion in comparison with 10.1 billion as a result of increased repatriations by foreign investors. Despite this, the central bank has reported that India's external sector has remained relatively strong and is also improving in key indicators.
As per the RBI, foreign exchange reserves in India increased to 698.95 billion by June 13 from 665.396 billion dollars on March 28. The central bank controls the rupee, which buys dollars to increase reserves and sells them to prevent excessive depreciation. This policy embraces monetary and currency stability in a fluctuating global economic situation.
Inflow of non-resident deposits decreased in April 2025 to US$751 million, compared to US$1.078 million made in the same month last year. Despite this decline, there is an overall increase in figures every year. The FY25 net non-resident deposits totalled 16.2 billion compared to 14.7 billion in the prior year.
Indian companies have registered greater net external commercial borrowing, with an increase of $2.8 billion in April 2025 compared to the $0.5 billion placed in April 2024. This is an indication of better issuance of funds in overseas markets to meet capital needs.
Conversely, foreign portfolio investment (FPI) flow into India dropped to $1.7 billion as of the time of writing FY25. The decline can be blamed on profit-taking among the foreign investors in equity markets.
Although the FPI inflow turned out to be lower, the high gross FDI inflow highlighted by the RBI shows that India is still an attractive country for long-term investment. The RBI bulletin has highlighted that an increase in repatriation is an indicator of a developed market, whereby foreign investors can freely come in and out, expressing greater flexibility that underpins stability in the market and confidence in the investors.