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Why India’s Net FDI Fell About 96% in FY2024-25, RBI Data Shows

India’s net FDI fell about 96% in FY2024-25, but gross inflows rose. The RBI’s accounting explains why the net balance shrank.
From TheFinanceBase Team2 min to read

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India’s net foreign direct investment (FDI) fell to US$0.4 billion in FY2024-25 from US$10.1 billion in FY2023-24—about a 96% decline based on the Reserve Bank of India’s rounded figures. That did not mean gross investment inflows fell: they rose to US$81.0 billion. Higher repatriation and disinvestment, along with more outward FDI, narrowed the net balance.

Why did net FDI fall about 96% in 2024-25?

The RBI attributes the drop to higher repatriation/disinvestment and net outward FDI. Its Annual Report 2024-25, published May 29, 2025, reports net FDI of US$0.4 billion in FY2024-25, down from US$10.1 billion in the previous fiscal year. The rounded figures imply a decline of about 96%; they do not support a more precise percentage.

The underlying components moved in different directions. Gross inflows increased, but more investment was repatriated or disinvested, and Indian investment abroad also rose. The resulting net figure is therefore much smaller than gross inflows.

How could FDI fall when gross inflows increased?

“FDI” can refer to different points in the accounting. The RBI’s table defines net inward FDI as gross inflows minus repatriation/disinvestment. It then calculates net FDI by subtracting net outward FDI from net inward FDI.

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In simplified form:

Net FDI = (gross inflows − repatriation/disinvestment) − net outward FDI

These figures, in US$ billions, show how each component changed between the two fiscal years:

RBI measure FY2023-24 FY2024-25
Gross inflows 71.3 81.0
Repatriation/disinvestment 44.5 51.5
Net outward FDI 16.7 29.2
Net FDI 10.1 0.4

All values are the RBI’s rounded fiscal-year figures. Subtracting the rounded component values may not reproduce the reported net total exactly because the underlying amounts are not rounded in the same way.

What does the annual figure say—and not say?

The US$0.4 billion figure is a full-year net balance, not a measure of gross investment, and it does not show that every quarter recorded an outflow or similarly low inflows. In April-June 2024, India recorded net FDI inflows of US$6.3 billion, compared with US$4.7 billion in the corresponding quarter a year earlier, according to the RBI’s Q1 2024-25 balance-of-payments release. The annual total includes subsequent quarters and all the components in the net calculation.

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Where did FDI equity flows come from?

The RBI said services accounted for a major share of FDI equity flows in FY2024-25, followed by manufacturing, electricity and other energy, retail and wholesale trade, and transport. Singapore, Mauritius, the United States, the Netherlands and the UAE together contributed three-fourths of FDI flows, according to the report. These sector and source-country details provide context, but they are not a breakdown of every component in the net-FDI calculation.

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