With regard to outflows, the outward FDI by Indian companies increased by 5.4% in January 2026 to $2.1 billion. This was, however, nearly 30% lower than the outward FDI in December 2025.
| Photo Credit: PTI
Net foreign direct investment (FDI) into India contracted for the fifth consecutive month in January 2026, with outflows exceeding inflows by nearly $1.4 billion, a three-month high. The data shows this was because inflows into India fell nearly 7% while the amount repatriated out of the country nearly doubled.
According to data released by the Reserve Bank of India on Monday as part of its monthly bulletin, the total amount of money entering India as direct investment, or gross FDI, stood at about $5.7 billion in January 2026.
This was 7% lower than in January last year, and only two-thirds of the amount that came in December 2025. The RBI, however, looked at a longer time period to draw some positive conclusions.
“During April 2025 – January 2026, gross FDI inflows remained strong, higher than the corresponding period a year ago,” the central bank noted in its report. “Sector-wise, manufacturing received the highest share of equity inflows, followed by computer services, electricity and other energy, and financial services — these sectors together accounted for over 60% of total inflows.”
With regard to outflows, the outward FDI by Indian companies increased by 5.4% in January 2026 to $2.1 billion. This was, however, nearly 30% lower than the outward FDI in December 2025.
“Around 75% of the outward FDI flows were directed to the U.S., Singapore, the UK, and the UAE during the [April 2025 – January 2026] period,” the RBI said.
Repatriation and disinvestment by foreign companies doing business in India, on the other hand, increased by 97.3% to $4.9 billion in January 2026. But this was nearly 18% lower than the amount in December 2025.
As a result, net FDI stood at about -$1.4 billion, the lowest since October 2025.
The central bank noted that portfolio investments again flowed out more than they flowed in in March this year.
“After staging a comeback in February 2026, foreign portfolio investments (FPIs) turned net sellers again in March 2026, driven by deteriorating global investor sentiment following the conflict in the Middle East,” the report said.
Published – March 23, 2026 10:18 pm IST
