India's FDI inflows jump 23% in April to $8.8B
What's the story
India's foreign direct investment (FDI) inflows witnessed a significant jump in April 2025, according to the Finance Ministry's Monthly Economic Review for May. The country recorded gross FDI inflows of $8.8 billion, nearly 23% higher than the same month last year. The figure is also an improvement over March 2025's $5.9 billion, indicating strong investor confidence amid global economic challenges.
Investment growth
Net FDI more than doubled during the month
The review also highlighted a major increase in net FDI for April. Excluding repatriations and outward investments, net FDI more than doubled during the month. This was mainly due to a sharp decline in repatriations, which fell by 59% year-on-year (YoY) to $1.7 billion. However, net outward FDI stood at $3.2 billion, up nearly 169% from April 2024 but lower than the previous month.
Sectoral distribution
Key sectors and destinations for outward FDI
Nearly half of the gross FDI inflows in April 2025 came from the manufacturing and business services sectors. Major destinations for outward FDI during this period were Singapore, Mauritius, and Germany. The top sectors that received these investments included electricity, gas, water supply, as well as financial services, according to the report.
Information
India ranked 16th in the world for FDI inflows
India is ranked 16th in the world for FDI inflows. Between 2020 and 2024, the country attracted $114 billion in greenfield investment into digital economy sectors, the highest among Global South countries, according to the data previously released by the Reserve Bank of India (RBI).
Forex impact
Surge in FDI inflows strengthens forex reserves
The surge in FDI inflows has also helped the RBI strengthen India's foreign exchange reserves. The country's forex reserves stood at $698.95 billion on June 13, up from $665.396 billion on March 28. The RBI buys dollars to boost reserves and sells US currency to avoid a sharp depreciation of the rupee.