6th month in a row: India sees net FDI outflow again in Jan, Pg13

Key Highlights:

• India experienced a net FDI outflow for the sixth consecutive month in January 2026.
• Gross FDI inflow decreased to an 11-month low of $5.67 billion in January 2026, a 33% decrease from December 2025 and 7% from January 2025.
• Net FDI outflow reached $1.39 billion in January 2026, nearly tripling from December 2025.
• FPIs withdrew a net $11.82 billion from Indian financial markets in March 2026 and $3.24 billion in January 2026.

Detailed Insights:

• Repatriation of FDI, including profits, dividends, or asset sales, contributed to the net outflow.
• The Indian rupee has depreciated significantly over the past year due to weak FDI flows and geopolitical factors.
• Delays in finalizing a trade agreement with the US and the West Asia conflict have increased global risk aversion towards emerging markets like India.
• The continuous outflow of FDI and FPI has put downward pressure on the Indian rupee, causing it to fall past multiple levels against the dollar.

Key Concepts Involved:

• Foreign Direct Investment (FDI): Investment made by a firm or individual in one country into business interests located in another country.
• Foreign Portfolio Investment (FPI): Investment in the financial assets of a foreign country such as stocks or bonds.
• Repatriation: The process of returning assets, profits, or individuals to their home country.