India’s net FDI (foreign direct investment) remained negative for the fourth consecutive month in December 2025, reaching -$1.6 billion. This was attributed to significant repatriation by foreign companies and increased outward investments by Indian firms, surpassing incoming direct investments, according to the Reserve Bank of India’s (RBI) latest data.
Understanding the Implications of Net FDI on India’s Economy
Gross inflows of direct investment reached a five-month high of $8.6 billion in December 2025, marking a 17.2% increase compared to December 2024. Singapore, the Netherlands, and Mauritius contributed over 80% of these inflows, with key sectors including transport, manufacturing, computer services, and energy generation and distribution.
Despite robust inflows, outflows were higher. Repatriation and disinvestments by foreign entities in India rose to nearly $7.5 billion, the highest since January 2021. Outward investments by Indian companies also surged to $2.7 billion, a 30.5% increase over December 2024 and 78% higher than November 2025.
The RBI previously cited uncertainty over the India-U.S. trade agreement and 50% tariffs as factors for investor hesitation. The December data precedes the announcement of the Interim Agreement with the U.S. and the Free Trade Agreement with the EU, which have since encouraged portfolio investors to return to India.
Published in SouthAsianDesk, February 21st, 2026
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