Net FDI inflows plunge 98% in May: What's the reason?
What's the story
India's net foreign direct investment (FDI) inflows have taken a massive hit, falling by 98% to $35 million in May 2025. The decline is steep when compared to the $2.2 billion recorded in May 2024 and the $3.9 billion of April this year, data released by the Reserve Bank of India shows. The sharp decline is attributed to lower gross inflows and higher repatriation levels during this period.
FDI breakdown
Gross FDI inflows
Net FDI is calculated by subtracting the money sent abroad by foreign firms operating in India (through repatriation/disinvestment), and Indian firms investing abroad (outward FDI) from the total inflow of funds into India. In May 2025, gross FDI inflows stood at $7.2 billion, an 18% decline from April's $8.7 billion and 11% lower than last year's figure for the same month.
Increased outflow
Surge in repatriation levels contributes to decline in net FDI
The data also shows a significant increase in the amount of money sent out of India by foreign firms operating here. Repatriation and disinvestment by these firms stood at $5 billion in May, over 200% higher than April's figures and nearly 24% higher than last year's figures for the same month.
Investment patterns
Indian companies' foreign investments show mixed trend
Indian companies' foreign investments in May this year stood at $2.1 billion, a 34% decline from April's figures, but an 18.5% increase compared to last year's figures for the same month.