Net FDI outflow again in Oct; foreign repatriations, Indian firms’ overseas investment above $8 billion

Net FDI is calculated after adjusting for investments that are repatriated by foreign companies and overseas investments made by Indian companies.

The net outflow in October was primarily due to foreign investors repatriating their funds and Indian companies investing abroad. In fact, the two together exceeded $8 billion for the second month running in October – the first time this has ever happened.

“The key destinations for outward FDI were Singapore, followed by the US and the UAE, together accounting for more than half of total outward FDI,” the RBI said on Monday in its monthly State of the Economy report. “Sector specific breakdown suggests that around 90 per cent of outward FDI was in financial, insurance, and business services, followed by wholesale, retail trade and manufacturing.”

In October, overseas investments by Indian companies stood at $3.09 billion, while foreign investors repatriated just under $5 billion. At $8.08 billion, the two combined was down from $8.67 billion in September, but 11 per cent higher than last year. So far in the first seven months of 2025-26, overseas investments by Indian companies and repatriations by foreign investors have totaled $52.13 billion, up from $47.26 billion in April-October 2024.

Indian companies’ outward FDI and foreign investors exiting their investments in India has added to the pressure on the rupee, which has fallen to record lows against the US dollar this month as it breached the 90- and 91-per-dollar marks in quick succession. However, the RBI’s intervention has relieved some pressure in recent days. The rupee closed at 89.65 per dollar on Monday.

The weak FDI inflows have caught the government’s attention, with Chief Economic Advisor V Anantha Nageswaran saying earlier this month that a rise in interest rates in developed countries and a push to localise supply chains had altered the FDI dynamic, with India having to compete not just with other emerging economies but also richer nations who want to onshore their production. This, the government’s top economist had said, is one of the reasons why Indian entities’ overseas investments have gone up “because in order to sell into those markets, you have to be present there these days rather than being able to export there”.

At the same time, Nageswaran had admitted that “we need to up our game with respect to courting FDI, courting global supply chain companies to come here”. “Even for exports to take off, you need investments coming in, both in terms of financial resources and technology, including in areas of energy sufficiency, etc. So, there is no question, therefore, that we do have to crank up the efforts in respect to FDI,” he had said.

Meanwhile, foreign investors have pulled out $17.73 billion so far in 2025 from the Indian equity markets on a net basis.