India recorded a rare net FDI outflow in August 2025, with foreign repatriations/disinvestments and Indian firms’ overseas investments together outpacing gross FDI inflows. This is the second negative month of FY26 (after May). Over a five-month horizon, however, the picture brightens: net FDI for April–August more than doubled year-on-year.
The Numbers (August 2025)
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Gross FDI inflows into India: $6,049 mn (↓ 30.6% YoY; ↓ 45.5% vs July) — the lowest monthly inflow of FY26 so far.
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Repatriation & disinvestment by foreign firms: $4,928 mn (↓ 5.4% YoY; ↑ ~30% vs July).
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Outward investment by Indian companies: $1,736 mn (↓ 29.7% MoM; lowest of FY26).
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Net FDI (inflows – outflows): –$616 mn → 159% lower YoY (i.e., moved further into negative territory).
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Previous negative month: May 2025 at –$5 mn.
April–August 2025 (Cumulative)
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Net FDI: $10,128 mn, ↑ 121% YoY.
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Gross inflows: $43,760 mn, ↑ 18.2% YoY.
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Repatriation & disinvestment: $21,205 mn, ↓ 6.1% YoY.
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Outward FDI by Indian firms: $12,427 mn, ↑ ~26% YoY.
What does a “–159%” change mean?
It indicates net FDI fell from a positive base last year to a negative figure this year. In August 2024, net FDI was positive; in August 2025 it turned negative (–$616 mn), so the year-on-year percentage change is both large and negative.
Why August Turned Negative
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Soft inflows: Sharp drop in gross inflows vs both July and Aug 2024.
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Higher outflows: Repatriations/disinvestments rose m/m, and though outward FDI by Indian firms slowed, combined outflows still exceeded inflows.
Why the 5-Month Trend Is Rosier
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Stronger pipeline: Higher gross inflows YTD indicate deal closures and expansions earlier in the year.
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Lower leakages: Repatriations/disinvestments contracted YoY, cushioning net inflows.
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Confidence signal: Despite a weak August print, the April–August rise in net FDI suggests underlying investor appetite remains intact.
What to Watch Next
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Sustainability of inflows: Whether September–December sees a rebound in greenfield and reinvested earnings.
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Sectoral mix: Manufacturing, digital infra, and renewables typically drive stickier FDI; monthly volatility is common when large exits bunch up.
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Global backdrop: Higher-for-longer rates and risk sentiment can swing repatriations and deal timing.
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Policy cadence: Progress on PLI, infrastructure, trade facilitation, and dispute resolution can steady quarterly inflows.
Credits: Reporting reference: The Hindu (T.C.A. Sharad Raghavan). Data source: RBI (as cited in report).
