India's net FDI may remain subdued in near term - Morgan Stanley
This story was originally published at 21:49 IST on 23 April 2026
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NEW DELHI – India's net foreign direct investment is likely to remain subdued in the near term, Morgan Stanley said in a report Thursday. However, the gross foreign direct investment may remain well-supported by the combination of greenfield and brownfield investment, according to the report.
While the outlook for gross foreign direct investment remains constructive, the net foreign direct investment is expected to remain weak due to an impact of higher repatriation along with rising outward foreign direct investment, the report said. "We anticipate the trend to sustain, albeit the magnitude of flows is likely to remain lumpy and deal-driven, and would remain contingent on both domestic and global growth as well as financial conditions," economists at Morgan Stanley, said in the report.
From the external balance sheet view, foreign direct investment is a more stable source of financing for the current account. "A sustained weakening in net flows could increase reliance on more volatile portfolio capital, with potential spillovers to external balance metrics, currency stability and financial markets," the report mentioned.
During Apr-Feb, gross foreign direct investment flows to India grew by 18.1% to $88.3 billion from $74.7 billion a year ago, according to Reserve Bank of India's latest monthly bulletin. Net FDI inflows were higher at $6.3 billion during Apr-Feb from $1.5 billion a year ago. End
US$1 = INR 94.10
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Reported by Shweta
Edited by Deepshikha Bhardwaj
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