Net FDI inflows surge to $7.3 bn in July, highest since May 2021 | Business News
3 min readNew DelhiSep 26, 2026 07:07 PM IST
Amid continued pressure on the external front due to changes in the global investment environment and better opportunities elsewhere, India saw a jump in net Foreign Direct Investment (FDI) inflows in July, with data released late Friday by the Reserve Bank of India (RBI) showing that it soared to an over five-year high of $7.35 billion. This is the highest monthly inflow since May 2021’s $8.80 billion.
On a gross basis, FDI in July was $14.58 billion, the third-highest in the last six years.
Compared to July 2025, the latest net and gross FDI figures are up 64% and 24%, respectively.
The latest FDI print comes even as the government warns of challenges on the external front, with Chief Economic Advisor V Anantha Nageswaran cautioning on Friday that “even if even if we tick (all the) boxes”, money may not flow in immediately.
“You can do everything right, the public will see that there is no result, and will therefore be clamouring for more. But the point is global context has shifted,” Nageswaran had said at an event, adding that higher global interest rates, among other factors, were key factors.
The government and the RBI have tried to encourage foreign inflows in the last four months, with the concessional swap window for Foreign Currency Non-Resident (Bank) deposits turning out to be overwhelmingly successful. However, the rupee is not too far away from its all-time low of 96.96 per dollar. It closed at 95.82 on Friday.
“Communication, financial and computer services were the major sectors, receiving more than four-fifths of the equity inflows,” the RBI said in its monthly State of the Economy article. “Mauritius, the UAE, and the US were the major source countries, accounting for about 70% of equity inflows.”
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For the first four months of 2026-27, net FDI inflows amounted to $13.43 billion, up 38% from the same period last year. Meanwhile, gross FDI was 13% higher at $43.85 billion.
Net FDI is calculated after adjusting gross FDI for investments that are repatriated by foreign companies and overseas investments made by Indian companies.
While attracting foreign capital has not been a problem for India – gross FDI rose 17% to $97 billion in 2025-26 – net FDI has moderated sharply in recent years due to rising overseas investments by Indian companies as well as foreign investors taking back some of the money they have made on past investments.
In July, foreign investors repatriated $3.84 billion, down 16% on year. Meanwhile, Indian companies’ outward FDI rose 26% to $3.39 billion.
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“More than two-thirds of outward FDI flows were directed towards Singapore, the UK, and the UAE. The major sectors witnessing outward FDI were financial, insurance and business services, and manufacturing – together accounting for about two-thirds of the outward flows,” the RBI noted.
While net FDI figures have seemingly turned for the better – 2024-25 and 2025-26 together saw a net inflow of just $7.7 billion – foreign investors continue to exit domestic financial markets. So far in 2026–27, foreign investors have sold Indian stocks and bonds to the tune of $6.54 billion on top of the $16.59 billion of sales in 2025–26.
Source: indianexpress.com