Foreign direct investment (FDI) inflows rose in both gross and net terms in FY26 compared to the previous year, the Reserve Bank of India’s (RBI) May 2006 bulletin showed, allaying apprehensions over the relative stagnation of capital inflows into the Indian economy.
Gross FDI inflows rose 17.3% to $94.5 billion in FY26 from $80.6 billion a year ago. Similarly, net FDI inflows rose nearly eight times to $7.7 billion in FY26 from around $1 billion the previous year, the bulletin revealed.
Breakdowns and Repatriation
Net FDI remained positive for the second consecutive month in March, bringing some relief amid persistent outflows by foreign portfolio investors (FPIs) because of the West Asia conflict.
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Net FDI remained negative for six consecutive months from August last year to January this year due to a rise in repatriation and outward FDI. It touched $4.4 billion in February and $1.6 billion in March this year.
While net FDI remained positive for the second consecutive month in March this year, gross inward FDI decelerated to $6.2 billion in March compared with $8.9 billion in February this year.
Contextualising the Recovery
“Outward FDI declined in March, with more than half of the flows directed to Singapore, the UAE, and the Netherlands,” the RBI’s May 2026 Bulletin said.
To be sure, net FDI touched an all-time high of $44 billion in FY21. It fell to $38.6 billion in FY22, then to $28 billion in FY23 and $10.9 billion in FY24.
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In contrast, during 2026-27 so far (up to May 20, 2026), foreign portfolio investors (FPI) registered net outflows of $10 billion, driven largely by withdrawals from the equity segment amidst persistent geopolitical uncertainty and continued tensions in West Asia.
TOPICSFDIThis article was first uploaded on May twenty-two, twenty twenty-six, at forty-eight minutes past eleven in the night.