A close up picture of letters FDI . Foreign direct investment will boost up the economy.
| Photo Credit: Chinmayi Shroff
Net foreign direct investment remained negative for the fourth consecutive month in December 2025, coming in at -$1.6 billion, due to repatriation by foreign companies in India and outward investments by Indian companies exceeding the amount of direct investment entering the country, an analysis of the latest data from the Reserve Bank of India (RBI) shows.
According to the RBI data, gross inflows of direct investment stood at a five-month high of $8.6 billion in December 2025, which was also 17.2% higher than in December 2024.
“Gross inward FDI remained robust in December, with Singapore, the Netherlands and Mauritius accounting for more than 80% of total inflows,” the RBI noted in its monthly bulletin report. “The major recipient sectors were transport, manufacturing, computer services, and electricity and other energy generation, distribution and transmission.”
However, while inflows witnessed relatively robust growth, outflows exceeded them. Repatriation and disinvestments by foreign companies operating in India increased to nearly $7.5 billion in December 2025, the highest since at least January 2021, the earlier period for which data is readily available.
Outward investments by Indian companies increased to $2.7 billion December, up 30.5% over December 2024 and 78% higher than in November 2025.
“For outward FDI, key destinations were Singapore, the U.S., the UAE, the UK and the Netherlands and the major sectors included financial, insurance and business services, and wholesale/retail trade, restaurants, and hotels,” the report noted.
In earlier editions of the report, the RBI had said that uncertainty over the India-U.S. trade agreement and the 50% tariffs had led to investor hesitation. The data for December 2025 comes before the announcement of the Interim Agreement with the U.S. and the Free Trade Agreement with the European Union, and so likely also reflects this sentiment.
In this edition, the RBI noted that the announcement of both deals had led to portfolio investors returning to India.
“Foreign portfolio investments (FPIs) staged a comeback in February with investor sentiments turning around following the India-EU free trade agreement and the interim India-US trade deal,” the report said.
Published – February 21, 2026 05:51 am IST
