RBI Policy
High gross FDI shows India as attractive investment destination
This story was originally published at 13:37 IST on 6 June 2025
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--RBI Malhotra: Net FDI important for FX reserves
--RBI Malhotra: Gross FDI the more important number than net FDI
--RBI Malhotra: For investment, gross FDI is important
--RBI Malhotra: Gross FDI invest increased sharply in FY25
--RBI Malhotra: Rise in repatriation of FDI a sign of a maturing market
--RBI Malhotra: Overall high gross FDI shows India attractive invest destination
MUMBAI – Reserve Bank of India Governor Sanjay Malhotra said the rise in the gross foreign direct investment in 2024-25 (Apr-Mar) demonstrates that foreign investors continue to consider India as a desirable investment destination. In contrast, the net FDI figure decreased in FY25, mostly due to a rise in repatriations, Malhotra said in the RBI's Monetary Policy statement Friday.
"Rise in repatriation is a sign of a mature market where foreign investors can enter and exit smoothly," Malhotra said.
Gross FDI inflows rose 14% on year to $81.0 billion in FY25. However, FPI inflows fell to $17 billion in the last fiscal due to profit booking by overseas investors in the Indian equity market, the governor said. So far in FY26, FPI activity into domestic market recorded an outflow of $2.1 billion.
Net FDI inflows fell to $400 million in FY25 from $10.1 billion a year ago. Malhotra said the gross FDI figure holds more significance to understand the investment landscape than the net FDI as the latter is of greater importance for foreign exchange reserves management. As on May 30, 2025, India's foreign exchange reserves was $691.5 billion.
"These (foreign exchange reserves) are sufficient to fund more than 11 months of goods imports and about 96% of external debt outstanding," the governor said. "Overall, India's external sector remains resilient as key external sector vulnerability indicators continue to improve." End
US$1 = INR 85.73
Reported by Vidhushi RajPurohit
Edited by Tanima Banerjee
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