Net FDI inflows rebounded in December as foreign investors repatriated a record $7.45 billion

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Net FDI is calculated after adjusting for repatriate investment by foreign companies and foreign investment by Indian companies. Repatriation of FDI refers to the repatriation of money previously invested in India by foreign investors. This repatriation can be in the form of profits, dividends or sale of assets.

In December, repatriation of foreign investors’ funds rose to $7.45 billion – a record high, according to data available from the RBI. This amount is almost 40% higher compared to November and December 2024. Foreign investors are increasingly repatriating money invested in Indian assets through FDI, with the total for the first nine months of 2025-26 reaching $44.45 billion, up 10% from the same period in 2024-25. Most of the exit – or $42.62 billion – was caused by foreign investors reducing their equity holdings.

Meanwhile, FDI by Indian companies also increased in December, rising to $2.75 billion – up 78% from November and 31% from December 2024.

“For outward FDIs, Singapore, US, UAE, UK and Netherlands are the main destinations and the main sectors include financial, insurance and business services and wholesale/retail trade, restaurants and hotels,” RBI staff said in the central bank’s monthly State of the Economy report published on Friday.

In the first nine months of 2025-26, foreign investment by Indian companies totaled $24.88 billion, up 35% year-on-year. While gross inflows rose 16% to $73.31 billion, combined with record repatriations, net FDI inflows were just under $4 billion this fiscal. Singapore, the Netherlands and Mauritius accounted for more than 80% of total gross FDI inflows in December, RBI’s State of the Economy report said, with transport, manufacturing, computer services and power and other energy generation, distribution and transmission the main recipient sectors.

Gross FDI inflows in 2025-26 are higher than the $80.62 billion recorded in 2024-25.

Net FDI inflows in 2024-25 are only $959 million.

The rupee has weakened significantly over the past 12 months, with weak FDI inflows a contributing factor. Another is the exit of Foreign Portfolio Investors (FPI) from Indian financial markets. In 2025, FPIs sold Indian shares worth a net of nearly $19 billion as concerns over US’s 50% tariffs on Indian goods dampened sentiment. This continued in January, with share sales by FPIs reaching $4 billion.

However, on February 2, India and the US reached an interim agreement, which eliminated the penal 25% tariff and reduced the reciprocal 25% tariff to 18%. Foreign investors bought nearly $2 billion of Indian equities so far this month, according to the latest data, helping ease pressure on the rupee, which closed at 90.99 to the dollar on Friday.