Foreign direct investment into India in July at 50-month high of $11.11 billion, Pg 15.

Key Highlights:

• India's gross Foreign Direct Investment (FDI) inflow reached a 50-month high of $11.11 billion in July 2025.
• This is the highest since May 2021, when gross inflows were $12.32 billion .
• Singapore, the Netherlands, Mauritius, the US, and the UAE were the source of more than three-fourths of total inflows.
• The manufacturing and services sectors were the top recipients.
• Net FDI in July was $5.05 billion, compared to $2.51 billion in June.
• S&P Global Ratings upgraded India's rating to BBB.

Detailed Insights:

• The increase in gross FDI inflows in July 2025 indicates growing investor confidence in India's economic potential.
• Inflows have increased after a disappointing 2024-25, which saw net FDI inflow total just $9.59 million, even though gross inflows rose to $80.62 billion.
• The sharp fall in net FDI in 2024-25 from $10.15 billion in 2023-24 was due to increased overseas direct investments by Indian companies and foreign companies cashing in on their past investments in India.
• In 2024-25, foreign firms took back $51.49 billion to their home countries from India, up 16% from 2023-24, while overseas FDI by Indian companies rose 69% to $28.17 billion.
• In the first four months of 2025-26, net FDI is $10.75 billion, three times that in the same period last year, gross FDI is up 33% at $37.71 billion, and repatriations by foreign companies is down 6% at $16.28 billion.
• Outward FDI was mainly directed towards financial, insurance and business services, as well as manufacturing, with the US, Singapore, the Netherlands, Mauritius, and the UK being the major destinations.
• The government's economic reforms, including cuts to the Goods and Services Tax (GST) rates, are expected to further boost domestic growth and attract more FDI.

Key Concepts Involved:

• Foreign Direct Investment (FDI): An investment made by a firm or individual in one country into business interests located in another country.
• Gross FDI: The total inflow of FDI into a country.
• Net FDI: Gross FDI minus investments that are repatriated by foreign companies and overseas investments made by Indian companies.
• Goods and Services Tax (GST): An indirect tax used in India on the supply of goods and services.