India recorded a strong surge in foreign direct investment (FDI) in April 2025, as gross inflows reached $8.8 billion, marking a 23% increase from $5.9 billion in March 2025, according to the Reserve Bank of India’s (RBI) monthly bulletin released on June 25.

The data also shows an uptick compared to April 2024, when gross FDI stood at $7.2 billion, indicating growing investor confidence in India’s economic environment.

Net FDI Doubles on Lower Repatriations

Perhaps more significant is the rise in net FDI, which more than doubled in April 2025. This was largely due to a sharp fall in outward remittances, repatriations, and disinvestments by foreign entities.

“Lower outward flows indicate improved capital retention and stronger reinvestment interest,” said an RBI official familiar with the data trends.

Breakdown of FDI Trends

• Gross FDI Inflows: $8.8 billion (April 2025)

• Gross FDI Inflows (March 2025): $5.9 billion

• Gross FDI Inflows (April 2024): $7.2 billion

• Net FDI (April 2025): Significantly higher than both March and April 2024 due to decreased outflows

The bulletin notes that lower redemptions and exits by existing foreign investors contributed to the surge in net figures, a reversal of previous trends that had seen consistent capital withdrawals.

Sectors Likely Driving FDI Growth

While a detailed sector-wise breakdown was not included in the monthly bulletin, analysts suggest that the increase may be driven by:

• Manufacturing and renewables, following policy incentives

• Financial technology and digital services, which have seen sustained investor interest

• Real estate and infrastructure, boosted by public-private partnerships and global institutional investments

Investor Sentiment and Policy Outlook

Experts attribute the increase in FDI to macroeconomic stability, a positive post-election investment outlook, and policy continuity in key industrial sectors. With India maintaining its growth projections and improving ease of doing business rankings, capital inflows are expected to remain robust in the coming quarters.

However, analysts also caution that global macroeconomic conditions and interest rate trends will continue to influence investment flows.

Conclusion: A Positive Signal for India’s Capital Account

The RBI’s April data provides an early indication of reviving global investor sentiment toward India, particularly in the wake of global uncertainty and domestic economic realignments.

As repatriations slow and gross inflows rise, net FDI figures could continue improving, offering critical support to India’s balance of payments and rupee stability.

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