Foreign Direct Investment (FDI)

FDI Inflow Summary – September 2025

India recorded its second consecutive month of net FDI outflows, driven by elevated repatriation and a sharp jump in outward investments by Indian companies.

Net FDI inflows

• –$2.38 billion in September 2025, a very sharp deterioration from –$0.62 billion in August 2025.
• This is the worst monthly FDI performance in the last 6 months, driven by higher disinvestment and weaker fresh equity inflows.

Gross FDI Inflows: $6.60 billion in September 2025 (▲ vs. $6.05 billion in August), breakdown:

• Equity inflows: $4.21 billion (▲ from $3.81 billion in August)
• Reinvested earnings: $1.81 billion (same as previous months)
• Other capital: $0.58 billion (▲ from $0.43 billion in August)

Key takeaway: Gross inflows improved mildly, supported by higher equity and other capital flows.

Repatriation / Disinvestment

• Rose sharply to $3.78B from $1.74B in August.
• Outward FDI absorbed nearly 57% of fresh inflows, significantly dragging down net FDI.

Outward FDI (by Indian companies)

• Rose sharply to $3.78B from $1.74B in August.
• Outward FDI absorbed nearly 57% of fresh inflows, significantly dragging down net FDI.

Net Portfolio Investment (FPI)

• –$0.99B outflows, much better than –$2.60B in August.
• FPIs continue to remain cautious amid global risk-off sentiment.

Total Investment Inflows (FDI + FPI)

• –$3.12B in September vs –$3.21B in August.
• Overall capital flows remain negative for the second month in a row.

Top Source Countries – Equity Inflows
(Cumulative country-wise FDI trends)

• Singapore and Mauritius remain the two largest contributors, together accounting for nearly half of the total cumulative FDI equity inflows into India.
• U.S. inflows remain strong, particularly in technology, financial services, and global capability centers; its share is broadly stable compared to earlier quarters.
• Investors from the Netherlands and Japan continue to support manufacturing and automobile-related inflows.
• No major new entrants appeared this quarter, but the UAE and Ireland continue to show moderate but consistent participation.
• Overall country concentration remains high, indicating India’s reliance on a handful of key investment hubs.

Top Performing Sectors – Major Sectors Equity Inflows

• The Services Sector retains its leadership position with cumulative inflows above $122B, supported by finance, business services, and outsourcing.
• Computer Software & Hardware continues to attract strong flows, now exceeding $116B, driven by digital transformation and global capability center expansion.
• Sectors showing noticeable improvement this year include Electronics, Automobile, and Renewable Energy, supported by PLI schemes and manufacturing incentives.
• Sectors such as Telecommunications, Metallurgy, and Traditional Infrastructure show relatively subdued inflows compared to their historic peaks.

State-Wise FDI – Equity Inflows 
(Cumulative Equity Inflows from 2019 – June 2025)

Top Performing States

• Maharashtra remains the largest FDI destination, attracting $94.04 billion in cumulative equity inflows. Strong presence of financial services, IT, manufacturing, and MNC headquarters keeps it dominant.
• Karnataka ranks second with $63.35 billion, supported by rapid growth in global capability centers, IT services, and deep-tech manufacturing.
• Gujarat follows with $46.11 billion, driven by ports, petrochemicals, manufacturing, and renewable energy.
• Delhi attracted $38.91 billion, maintaining its role as a hub for services, consulting, finance, and digital companies.
• Tamil Nadu recorded $17.30 billion, led by automobiles, electronics, and hardware manufacturing.

Mid-Tier States

• Haryana: $13.91 billion, supported by automobiles, logistics, and corporate offices.
• Telangana: $11.16 billion, reflecting strong IT, R&D centers, and deep-tech activity.
• Rajasthan: $3.27 billion, stable inflows in manufacturing and renewable energy.
• Jharkhand: $2.68 billion, primarily natural resources and heavy industries.
• Uttar Pradesh: $2.15 billion, driven gradually by electronics and manufacturing clusters.

Lower-Tier & Emerging States

• West Bengal: $1.95 billion
• Kerala: $1.56 billion
• Punjab: $1.29 billion
• Andhra Pradesh: $1.27 billion
• Madhya Pradesh: $626 million
• Himachal Pradesh: $410 million
• Uttarakhand: $232 million

Smaller northeastern and union territories — Ladakh, Meghalaya, Tripura, Assam, J&K, Arunachal Pradesh — collectively remain below $30 million each.

Long-Term YoY FDI Trend 

• India’s cumulative FDI inflow (Apr 2000 – Jun 2025): $1,097.09 billion.
• FY 2025–26 (Apr–Jun) has already recorded $25.17 billion, showing a steady start.
• FDI in FY 2024–25: $80.62 billion, reflecting a +13% increase vs the previous year.
• FDI in FY 2023–24: $71.28 billion, slightly lower than FY22–23.
• FDI in FY 2022–23: $71.35 billion, marking a –16% decline vs FY21–22.
• Reinvested earnings and other capital remain stable components as per the RBI.

Key Takeaway: Long-term FDI remains strong, crossing $1.09 trillion, but the last 3 years show slowing momentum compared to the post-pandemic surge.

India’s FDI Position in the Global Context

• With cumulative inflows above $1.097 trillion, India remains one of the top global recipients of FDI since 2000.
• India consistently ranks among the world’s fastest-growing large FDI destinations, supported by services, digital infrastructure, and manufacturing-led incentives.
• Despite short-term monthly volatility, India’s long-term FDI trajectory remains strong.