Net foreign direct investment (FDI) remained negative for the third straight month in November, data released by the Reserve Bank of India (RBI) showed, even as gross and net FDI remained higher in April-November of FY26 compared with the same period of last fiscal.
The latest bulletin by the central bank pointed to high repatriation for the net FDI remaining weak, even as it moderated from the previous month. Singapore, Mauritius, the US and the UK accounted for more than half of the total outward FDI.
Sector-specific breakdown suggests that more than 70 per cent of outward FDI was in manufacturing, financial, insurance and business services sectors. Net FDI stood at $5.62 billion (provisional) between April-November compared with 0.78 billion in the same period of FY25.
In FY25, net FDI had sunk to a multi-year low, led by repatriation by foreign companies and outward investment by Indian companies. Net FDI stood at $0.96 billion according to the latest RBI data.
Moreover, foreign portfolio investors continued to take money out of Indian equities. The uncertainty surrounding the India-US trade deal and the weakening of the rupee have kept net FPI flows to India muted in recent months.
After a brief phase of net inflows in October and November, FPIs registered net outflows of $4.2 billion in December. Debt flows also turned negative in December after a five-month period. Net FPI outflows were at $6.6 billion in this fiscal up to January 16, 2026.
Resilient economy
The Indian economy showed resilience despite elevated geopolitical risks, the bulletin argued.
The year 2026 began with an escalation of geopolitical tensions, marked by developments such as the US intervention in Venezuela, the simmering conflict in West Asia, ambiguity surrounding the Russia–Ukraine peace deal and escalation of the row over Greenland, all of which point to still-elevated geo-economic risks and policy uncertainty ahead.
However, the first advance estimates of gross domestic product (GDP) for 2025-26 reflected the resilience of the Indian economy, driven by domestic factors such as private final consumption expenditure and fixed investment – amidst a challenging external environment, RBI said.
“A strong rebound in the manufacturing sector and continued buoyancy in services are expected to boost growth in gross value added (GVA). High-frequency indicators for December suggest continued buoyancy in growth impulses. Demand conditions remained upbeat, underpinned by a resurgence in rural demand and a gradual recovery in urban demand,” the central bank said in the bulletin.
Going forward, the bulletin said the policy focus on striking a balance between innovation and stability, consumer protection and a prudent approach to regulation and supervision should help improve productivity and support long term growth.