Net foreign direct investment (FDI) into India rose sharply to $7.6 billion in in FY26, with March 2026 being the second consecutive month of positive net inflows. Net FDI was $959 million in FY25, as per RBI data.

The net FDI was driven by gross investment inflows rising to $94.5 billion in FY26 compared to $80.6 billion in FY25. Repatriation rose marginally to $53.6 billion from $51.5 billion.

However, outward direct investments by Indian companies rose to $33.3 billion from $28.2 billion in FY25.

“During 2025-26, both gross and net foreign direct investment inflows were higher than the previous year. In March, net FDI remained positive for the second consecutive month, despite a deceleration in gross FDI, on account of relatively low repatriation and outward FDI. The rupee depreciated in May, with renewed geopolitical tensions and elevated crude oil prices exerting pressure,” the RBI said in its May bulletin.

However, the positive rise in net foreign direct investment was overshadowed by a steep drop in foreign investment inflows. 

With the West Asia war straining the rupee and the forex reserves of the country, total foreign investment flows (both direct and portfolio investment) recorded an outflow of $11.7 billion in March 2026, the first month of the US-Iran crisis. In March 2025, the corresponding foreign investment flows stood at an inflow of $7.3 billion.

For the full year FY26, foreign investment flows recorded an outflow of $9 billion compared to an inflow of $4.5 billion in FY25. 

Published on May 22, 2026