{"id":43967,"date":"2025-05-23T20:55:29","date_gmt":"2025-05-23T15:25:29","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=43967"},"modified":"2025-05-23T20:55:44","modified_gmt":"2025-05-23T15:25:44","slug":"net-fdi-slumps-96-percent-in-fy-25-to-dollar-353-mn","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/current-affairs\/23-05-2025\/net-fdi-slumps-96-percent-in-fy-25-to-dollar-353-mn","title":{"rendered":"Net FDI slumps 96% in FY25 to $353 mn"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>As per the RBI, the <strong>Net foreign direct investment (FDI) into India<\/strong> crashed by more than<strong> 96% to just $353 million<\/strong> in 2024-25 as compared to the previous year.\u00a0<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>About<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The net FDI figure stood a<strong>t $44 billion in 2020-21,<\/strong> it fell to $10.1 billion in 2023-24, and finally to just <strong>$353 million ($0.4 billion) in 2024-25.<\/strong><\/li>\n\n\n\n<li>While <strong>gross FDI inflows <\/strong>are healthy and diversified, <strong>net FDI<\/strong> is falling due to:\n<ul class=\"wp-block-list\">\n<li><strong>Higher repatriation by foreign companies<\/strong> (profit-taking, divestment).<\/li>\n\n\n\n<li><strong>Increasing outward investment <\/strong>by Indian companies (global expansion).<\/li>\n\n\n\n<li>In 2024-25, Indian companies invested a total of <strong>$29.2 billion in other countries<\/strong>, <strong>75% higher <\/strong>than the previous year.<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Gross Inflows:<\/strong> Gross FDI <strong>remained elevated <\/strong>in FY25, with 13.7%\u00a0 year-on-year (Y-o-Y) growth to clock $81 billion worth of flows.\n<ul class=\"wp-block-list\">\n<li>More than<strong> 60% <\/strong>of gross FDI inflows in FY25 were in<strong> manufacturing, financial services, electricity and other energy, and communication services sectors.\u00a0<\/strong><\/li>\n\n\n\n<li>Singapore, Mauritius, the UAE, the Netherlands, and the United States (US) accounted for more than<strong> 75% of the flows.<\/strong><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Net Foreign Direct Investment<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Net FDI <\/strong>is gross FDI, which is the total money coming in, minus the money being repatriated out by foreign companies doing business in India and the outward FDI by Indian companies.\n<ul class=\"wp-block-list\">\n<li><strong>Net FDI <\/strong>= Gross FDI Inflows \u2212 (Repatriation by foreign firms + Outward FDI by Indian firms).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li><strong>Key Components:<\/strong>\n<ul class=\"wp-block-list\">\n<li><strong>Gross FDI Inflows:<\/strong> Total new investments made by foreign entities into the country. It includes setting up factories, acquiring local companies, or expanding operations.<\/li>\n\n\n\n<li><strong>Repatriation &amp; Disinvestment:<\/strong> Profits or capital that foreign companies send back to their home countries. Includes sale of assets or shares in domestic firms.<\/li>\n\n\n\n<li>\u00a0<strong>Outward FDI: <\/strong>Investments made by domestic companies in foreign countries (e.g., acquisitions, setting up subsidiaries).<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Why Net FDI Matters?\u00a0<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Positive Net FDI: <\/strong>Indicates more foreign investment is coming in than going out, often seen as a sign of economic attractiveness.<\/li>\n\n\n\n<li><strong>Low or Negative Net FDI:<\/strong> May suggest capital is being withdrawn or domestic firms are investing more abroad than foreigners are investing locally.\n<ul class=\"wp-block-list\">\n<li>Not always negative but it may reflect economic maturity or global ambition.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/www.thehindu.com\/business\/markets\/net-fdi-falls-96-in-2024-25-to-353-mn-gross-fdi-remains-robust\/article69605398.ece#:~:text=Net%20foreign%20direct%20investment%20(FDI,Reserve%20Bank%20of%20India%20shows.\" rel=\"nofollow noopener\" target=\"_blank\"><strong>TH<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<h3><strong>Context<\/strong><\/h3>\n<li class=\"ms-5\">As per the RBI, the Net foreign direct investment (FDI) into India crashed by more than 96% to just $353 million in 2024-25 as compared to the previous year.\u00a0<\/li>\n<p><\/p>\n<h3><strong>Why Net FDI Matters?\u00a0<\/strong><\/h3>\n<li class=\"ms-5\">Positive Net FDI: Indicates more foreign investment is coming in than going out, often seen as a sign of economic attractiveness.<\/li>\n<li class=\"ms-5\">Low or Negative Net FDI: May suggest capital is being withdrawn or domestic firms are investing more abroad than foreigners are investing locally.<\/li>\n<li class=\"ms-5\">Not always negative but it may reflect economic maturity or global ambition.<\/li>\n<p><a href=\"https:\/\/www.nextias.com\/ca\/current-affairs\/23-05-2025\/net-fdi-slumps-96-percent-in-fy-25-to-dollar-353-mn\" class=\"btn btn-primary btn-sm float-end\">Read\u00a0More<\/a><\/p>\n","protected":false},"author":15,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-43967","post","type-post","status-publish","format-standard","hentry","category-current-affairs"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/43967","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/15"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=43967"}],"version-history":[{"count":3,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/43967\/revisions"}],"predecessor-version":[{"id":43996,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/43967\/revisions\/43996"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=43967"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=43967"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=43967"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}