India saw a decline in overall foreign direct investment (FDI) inflows, which stood at $62.48 billion in FY25 (April-December), compared to $71.27 billion in FY24 and $71.35 billion in FY23, according to data presented in the Lok Sabha. The decline signals cautious global investor sentiment despite India’s continued policy reforms.
Meanwhile, Russian FDI equity inflows into India surged more than threefold in FY25 to $18.45 million, compared to $5.16 million in FY24. The highest in the past four years was recorded in FY25, marking a sharp increase amid strengthening economic ties between the two countries.
Foreign investment trends in India
| Financial Year | Total FDI Inflows (USD Million) | FDI Equity Inflows from Russia (USD Million) |
|---|---|---|
| 2021-22 | 84,835 | 7.50 |
| 2022-23 | 71,355 | 8.82 |
| 2023-24 | 71,279 | 5.16 |
| 2024-25* | 62,483 | 18.45 |
(*April-December)
Total Foreign Direct Investment (FDI) inflows comprise equity inflows, equity capital of unincorporated bodies, reinvested earnings, and other capital.
FPI inflows volatile; net outflow of $1.68 billion in FY25
Foreign Portfolio Investment (FPI) in India has witnessed sharp fluctuations. After seeing a net inflow of $41.04 billion in FY24, India has recorded a net outflow of $1.68 billion in FY25 (till March 5, 2025).
| Financial Year | FPI Net Inflows (USD Million) |
|---|---|
| 2021-22 | -16,017 |
| 2022-23 | -5,510 |
| 2023-24 | 41,043 |
| 2024-25* | -1,683 |
(*Till March 5, 2025)
Government initiatives to attract foreign investmentsTo boost Foreign Direct Investment (FDI), the government has established a liberalised investment framework, allowing 100% FDI under the automatic route in most sectors, barring a few strategic industries.
Over the years, several key policy reforms have been introduced across sectors such as defence, telecom, e-commerce, civil aviation, pharmaceuticals, insurance, digital media, and coal mining to enhance investor confidence. The FDI policy is regularly reviewed to maintain India’s appeal as a global investment hub.
For Foreign Portfolio Investment (FPI), the government has undertaken major reforms to streamline processes and increase participation. These include:
- Simplified onboarding and registration procedures for FPIs.
- Approval for FPIs to trade in Exchange-Traded Commodity Derivatives (ETCDs) in India.
- Expanded participation for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Resident Indians in SEBI-registered FPIs based in India’s International Financial Services Centres (IFSCs).
- Reclassification framework, allowing FPI investments to be converted into FDI under specific conditions.
These measures are part of the government’s broader strategy to enhance the ease of doing business and strengthen India’s position as a preferred investment destination.
