Mumbai— India saw a strong surge in foreign direct investment (FDI) inflows in April 2025, with gross inward FDI rising to $8.8 billion, according to the Reserve Bank of India’s (RBI) monthly bulletin released on Wednesday. This marks a significant increase from $5.9 billion in March and $7.2 billion in April 2024.
The manufacturing and business services sectors accounted for nearly half of the total FDI inflows during the month, underlining their continued appeal to global investors.
India ranked 16th globally in overall FDI inflows and attracted $114 billion in greenfield investments in digital economy sectors between 2020 and 2024 — the highest among countries in the Global South, the RBI noted.
Foreign portfolio investments (FPI) also recorded net inflows of $1.7 billion in May 2025, largely driven by gains in the equity segment. This marked the third consecutive month of equity inflows, buoyed by easing geopolitical tensions — including the India-Pakistan ceasefire and a US-China trade truce — as well as stronger-than-expected Q4 2024–25 corporate earnings, which helped lift investor sentiment and prompted a shift in global portfolios toward Indian assets.
Top recipient sectors during the period included telecommunications, services, and capital goods. The debt segment, which saw outflows in the previous month, recorded a pause in net withdrawals in May, even as the yield gap between Indian and U.S. government bonds stayed below 2% for most of the month.
Non-Resident Indian (NRI) deposits also climbed, reaching $165.43 billion in April 2025, up from $164.68 billion a year earlier. Within this, Foreign Currency Non-Resident Bank [FCNR(B)] deposits posted a notable 9% year-on-year increase, with outstanding balances rising to $33.08 billion from $30.26 billion. Despite accounting for a smaller share of total NRI deposits, FCNR(B) saw the sharpest growth rate. Monthly inflows under this category reached $483 million in April 2025, up from a provisional $272 million in April 2024–26.
India’s build-up of foreign exchange reserves further strengthened the rupee and reinforced the country’s external sector stability. The current reserves are sufficient to cover over 11 months of import requirements.
“The Indian rupee (INR) appreciated by 0.4% month-on-month against the U.S. dollar and exhibited low volatility in May 2025,” the RBI bulletin added. It also noted that broader uncertainty surrounding U.S. trade and fiscal policy contributed to the appreciation of emerging market currencies, including the INR. (Source: IANS)
