India’s Net FDI Surges to Five-Year High of $7.35 Billion
Net foreign direct investment jumped 64% year-on-year in July, while gross FDI reached $14.58 billion as communication, financial and computer services attracted the bulk of equity inflows.
India recorded a sharp rise in foreign direct investment in July, with net FDI inflows climbing to $7.35 billion, the highest monthly level in more than five years, according to data released by the Reserve Bank of India.
The July figure is the strongest since May 2021, when net FDI stood at $8.80 billion, marking a significant improvement in foreign investment flows amid a challenging global investment environment.
On a gross basis, FDI inflows reached $14.58 billion in July, making it the third-highest monthly gross inflow recorded in the last six years.
FDI SNAPSHOT — JULY 2026
$7.35 billion — Net FDI inflows
$14.58 billion — Gross FDI inflows
64% — Year-on-year increase in net FDI
24% — Year-on-year increase in gross FDI
Highest net FDI since May 2021
Compared with July 2025, net FDI increased 64%, while gross inflows were 24% higher.
Communication, financial and computer services emerged as the major recipients of foreign equity investment. Together, these sectors accounted for more than four-fifths of equity inflows, according to the RBI.
The geographical concentration of investment was also significant. Mauritius, the United Arab Emirates and the United States accounted for around 70% of equity inflows during the period.
India's improving July numbers also lifted the performance for the first four months of the current financial year.
During April-July 2026-27, net FDI reached $13.43 billion, an increase of 38% compared with the corresponding period a year earlier. Gross FDI during the four-month period rose 13% to $43.85 billion.
APRIL–JULY 2026-27
Net FDI: $13.43 billion — up 38% YoY
Gross FDI: $43.85 billion — up 13% YoY
Net FDI differs from the headline gross investment figure because it adjusts gross foreign investment for money repatriated by foreign companies as well as overseas investments made by Indian companies.
In July, foreign investors repatriated $3.84 billion, 16% lower than a year earlier. At the same time, outward FDI by Indian companies increased 26% to $3.39 billion.
More than two-thirds of India's outward FDI was directed towards Singapore, the United Kingdom and the UAE, with financial, insurance and business services along with manufacturing accounting for about two-thirds of those overseas flows.
India had already recorded $97 billion in gross FDI during 2025-26, an increase of 17%. However, net FDI had remained considerably weaker because of higher outward investment by Indian companies and repatriation by foreign investors.
The latest numbers therefore represent a notable improvement in net flows, although broader external-sector pressures remain.
Foreign investors have continued to sell Indian stocks and bonds. During 2026-27 so far, foreign investors have sold about $6.54 billion of Indian equities and bonds, following sales of $16.59 billion in 2025-26.
The rupee has also remained under pressure. It closed at 95.82 against the US dollar on Friday, not far from its record low of 96.96.
Chief Economic Adviser V Anantha Nageswaran has cautioned that the global environment for investment has changed, with factors such as higher international interest rates affecting the movement of capital even when domestic conditions improve.
July's FDI figures nevertheless show a substantial acceleration in direct investment flows, with technology-linked and financial services sectors accounting for a large share of incoming foreign equity.