Finance Ministry views FY25 net FDI of $0.4 billion as subdued but not worrisome

The Finance Ministry views the net foreign direct investment (FDI) for FY25 as “rather subdued,” but not a sign of worry, with figures settling at just $0.4 billion.

The ministry explains that a rise in repatriations by foreign investors, coupled with a simultaneous increase in overseas direct investments by Indian firms—up nearly $12.5 billion in FY25—has resulted in muted net inflows.

However, the ministry has observed that the outflows caused by the growing global expansion of Indian firms may need a closer look from a policy standpoint.

It says, “…Even as uncertainty reigned in the world, increasing overseas direct investments warrants attention, especially given their cautious attitude towards domestic investment.”

This is when FY25 gross FDI into India touched a new high of $81 billion, underscoring continued global investor confidence in India.

Policymakers add, profit-booking by foreign investors also reflects the depth and efficiency of Indian markets—past investors could find buyers at an attractive price and take exit, which is a sign of a mature market.

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