Amid concerns over India’s net foreign direct investment (FDI) plummeting 96% to just $0.4 billion in 2024–25, data from the Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, paints a more nuanced picture. It shows that gross FDI inflows into India actually rose 14% to $81 billion during the year, up from $71.25 billion in 2023–24.
Of the total FDI in 2024–25, around $50 billion came through the automatic or government approval routes, $23.5 billion was reinvested earnings, and another $6.5 billion came in as other capital.
The services sector emerged as the top recipient of FDI equity, attracting 19% of total inflows, followed by computer software and hardware (16%) and trading (8%). FDI into the services sector rose sharply by 40.77% to $9.35 billion from $6.64 billion in the previous year. Meanwhile, FDI into manufacturing increased 18% to $19.04 billion compared to $16.12 billion in 2023–24.
Among states, Maharashtra attracted the largest share of FDI equity inflows at 39%, followed by Karnataka (13%) and Delhi (12%). On the source country front, Singapore led with a 19% share, followed by Mauritius (10%) and the United States (7%). Inflow from UAE showed the highest growth of almost 50% to $4.3 billion.
In a media statement, the Ministry of Commerce and Industry highlighted that the government has implemented transformative reforms across various sectors to liberalize FDI norms. As a result, it said, India attracted $748.78 billion in FDI over the past 11 years (2014–2025), a 143% increase compared to $308.38 billion during the previous 11-year period (2003–2014).
However, the Reserve Bank of India (RBI), in its recent monthly bulletin, noted that net FDI—calculated by subtracting repatriation and outward FDI from gross FDI—fell to just $0.4 billion in 2024–25 from $10.1 billion a year ago. Despite the dramatic fall in net FDI, the RBI said: “This is a sign of a mature market where foreign investors can enter and exit smoothly, which reflects positively on the Indian economy.”
Economists the New Indian Express spoke to echoed this sentiment, stating that as long as gross inflows remain strong, the situation isn’t alarming. “India has experienced a net FDI inflow of just $0.4 billion for the first time in 14 years, driven by a sharp rise in repatriation and a doubling of outbound investments, even as gross inflows remain healthy. This repatriation primarily reflects profit-taking on past investments made by foreign private equity and venture capital funds,” said Namrata Mittal, economist at SBI Mutual Fund.