FDI inflows rise to $8.8 billion in April, NRI deposit mobilisation slows

Time of India

5 hours ago

India attracted $8.8 billion in foreign direct investment (
FDI
) in April, which was 22% higher than the gross inflows in the year-ago month, helping the
Reserve Bank of India
rebuild the country's foreign exchange reserves amid pressure to protect the rupee from excess volatility.
However, the inflows in non-resident deposits slowed, with banks collectively seeing $751 million in the first month of the fiscal year compared with $1.078 billion a year ago, according to data published by the central bank in its June bulletin.
Net external commercial borrowing by Indian companies rose to $2.8 billion in April from $0.5 billion a year ago.
"Overall, India's external sector remains resilient as key external sector vulnerability indicators continue to improve. We remain confident of meeting our external financing requirements," the central bank said.
India's forex reserves stood at $698.95 billion at the end of June 13, compared with $665.396 billion as on March 28. RBI buys dollars from the market to build the reserves while it sells the US greenback when it wants to prevent any sharp depreciation in the local currency.
The gross FDI inflows remained strong in FY25, too, rising by around 14% to $81 billion from $71.3 billion a year ago. However, net FDI inflows moderated to $0.4 billion from $10.1 billion due to rise in repatriation.
"Rise in repatriation is a sign of a mature market where foreign investors can enter and exit smoothly, while high gross FDI indicates that India continues to remain an attractive investment destination," RBI said in the monthly report.
On the financing side, foreign portfolio investment (FPI) to India dropped sharply to $1.7 billion in FY25, as foreign portfolio investors booked profits in equities.
Non-resident deposits recorded a higher net inflow of US$ 16.2 billion in 2024-25 compared with US$ 14.7 billion a year ago.