Net FDI dives 98% due to lower inflows and higher repatriation
India's net Foreign Direct Investment (FDI) inflows plummeted by 98% to $35 million in May 2025, significantly lower than previous months. This sharp decline is attributed to both reduced gross FDI inflows and a substantial increase in repatriation and disinvestment by foreign firms. Gross FDI stood at $7.2 billion, an 11% decrease from May 2024. Simultaneously, repatriations and disinvestments by foreign companies surged to $5 billion, a 24% increase from a year ago. Outward FDI by Indian firms also increased by 18.5% year-on-year to $2.1 billion, further contributing to the lower net figure, according to data from the Reserve Bank of India.
Key Points
- Net FDI inflows into India experienced a drastic 98% decline in May 2025.
- The reduction is a result of both lower gross FDI inflows and increased outflows due to repatriation and disinvestment.
- Foreign companies significantly increased their repatriation and disinvestment activities compared to the previous year.
- Indian firms also made higher foreign investments abroad, contributing to the overall lower net FDI.
- The data highlights a concerning trend in foreign investment dynamics for the Indian economy.
Exam Facts
- Net FDI inflows: $35 million in May 2025.
- Gross FDI: $7.2 billion in May 2025.
- Repatriations/disinvestment by foreign firms: $5 billion in May 2025.
- Foreign investments by Indian firms: $2.1 billion in May 2025.
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