In the Financial Year 2025, the net foreign direct investment (FDI) in India crashed by over 96% to $0.4 billion from $10.1 billion a year ago due to higher repatriation and outward flow, data from the Reserve Bank of India (RBI) said.

Notably, in FY23, the net FDI was $28.0 billion.

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The RBI, in its monthly bulletin for May 2025, said, “The decline in FY25 is a sign of a mature market where foreign investors can enter and exit smoothly, which reflects positively on the Indian economy.

The gross FDI remained elevated in FY25, with 13.7% YoY growth to clock $81 billion worth of flows. In FY24, it was $ 71.3 billion and $71.4 in FY23, according to RBI data.

It said that India is increasingly positioned to function as a “connector country” that can become a key intermediary in sectors such as technology, digital services and pharmaceuticals. “In the midst of global trade realignments and industrial policy shifts, India is increasingly positioned to function as a “connector country” that can become a key intermediary in sectors such as technology, digital services and pharmaceuticals,” the article said.

“Going forward, notwithstanding the daunting challenges in the horizon, India stands well-positioned to navigate the ongoing global headwinds with confidence, ready to harness emerging opportunities and consolidate its role as a key driver of global growth,” it said.

It further said that persistent trade frictions, heightened policy uncertainty, and weak consumer sentiment continue to create headwinds for global growth.