3 min readNew DelhiMar 23, 2026 06:24 PM IST
Foreign Direct Investment (FDI) saw an outflow from India on a net basis for the sixth month in a row in January, according to data released by the Reserve Bank of India (RBI) on Monday, nearly tripling from their December 2025 levels as gross FDI fell by a third.
In January, gross FDI into India declined to an 11-month low of $5.67 billion – down 33% from December and 7% from January 2025. As a result, net FDI – which is calculated after adjusting for investments that are repatriated by foreign companies and overseas investments made by Indian companies – saw an outflow of $1.39 billion in the first month of 2026.
Repatriation of FDI refers to foreign investors taking back money they had previously invested in India. This repatriation can be in the form of profits, dividend, or sale of assets.
Weakness in FDI flows – seen as a more stable form of foreign investment – has contributed to the sharp depreciation in the Indian rupee over the last year or so. After falling past the 90- and 91-per-dollar levels in December amid a delay in the finalisation of a trade agreement with the US, the war in West Asia has led to a global aversion to risky assets such as those of emerging markets like India. As a result, Foreign Portfolio Investors (FPIs) have pulled out funds to the tune of billions of dollars from financial markets, leading to the rupee dropping past 92-, 93-, and 94-per-dollar levels in quick succession.
According to latest data from the National Securities Depository Ltd, FPIs have pulled out a net $11.82 billion from Indian financial markets so far in March. In January, they had pulled out $3.24 billion.
Apart from lower gross FDI, India saw net FDI outflows again in January because of elevated repatriation of foreign money and foreign direct investments by Indian companies themselves. In January, repatriations stood at $4.92 billion – down 18% from December 2025 but nearly double the January 2025 figure of $2.49 billion. Meanwhile, FDI by Indian companies was down 30% from December 2025, but up 5% from a year ago. The RBI noted in its monthly State of the Economy article that around 75% of outward FDI flows were directed to the US, Singapore, the UK, and the UAE.
For the first 10 months of 2025-26 as a whole, India has seen gross FDI inflow of $79.32 billion, up 15% from the same period of 2024-25, with the RBI saying that manufacturing received the highest share of equity inflows, followed by computer services, electricity and other energy, and financial services. These sectors put together accounted for more than 60% of total inflows, the central bank said.
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While gross FDI inflows are greater than last year in April 2025–January 2026, net FDI is down 24% at $1.66 billion on the back of a 37% rise in outward FDI to $28.14 billion and 6% increase in repatriations to $49.52 billion.
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