Rise in repatriation sign of mature market: RBI Guv on moderation in net FDI
In 2024-25, foreign portfolio investment (FPI) to India dropped sharply to USD 1.7 billion, as foreign portfolio investors booked profits in equities.
Gross foreign direct investment (FDI) inflows remained strong, rising by around 14 per cent to USD 81 billion in 2024-25, from USD 71.3 billion a year ago. However, net FDI inflows moderated to USD 0.4 billion in 2024-25, from USD 10.1 billion a year ago.
Mumbai, Jun 6 (PTI) India continues to remain an attractive investment destination and rise in repatriation of funds is a sign of a mature market where foreign investors can enter and exit smoothly, Reserve Bank Governor Sanjay Malhotra said on Friday.
The moderation in net FDI 'is on account of a rise in repatriation and net outward FDI, while gross FDI actually increased by 14 per cent,' Malhotra said, while unveiling the June monetary policy.
Rise in repatriation is a sign of a mature market, where foreign investors can enter and exit smoothly, he said, adding 'high gross FDI indicates that India continues to remain an attractive investment destination'.
The governor also said that with the moderation in trade deficit in Q4:2024-25, alongside strong services exports and remittance receipts, the current account deficit (CAD) for 2024-25 is expected to remain low.
Furthermore, despite rising geopolitical uncertainties and trade tensions, India's merchandise trade remained robust in April 2025.
As imports grew faster than exports, the trade deficit, however, widened during the month.
'Going forward, net services and remittance receipts are likely to remain in surplus, counterbalancing the rise in trade deficit. The CAD for 2025-26 is expected to remain well within the sustainable level,' Malhotra said.
As on May 30, 2025, India's foreign exchange reserves stood at USD 691.5 billion, down from USD 692.721 billion during the week ended May 23. These are sufficient to fund more than 11 months of goods imports and about 96 per cent of external debt outstanding.
Overall, India's external sector remains resilient as key external sector vulnerability indicators continue to improve, the governor said. PTI NKD CS DRR
This report is auto-generated from PTI news service. ThePrint holds no responsibility for its content.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Hindu
an hour ago
- The Hindu
RBI slashes repo rate by 0.5% to boost growth
In a bid to spur growth at a time when inflation has come under control, the Reserve Bank of India's Monetary Policy Committee on Friday (June 6, 2025) voted 5:1 to slash the policy repo rate by a bigger-than-expected 50 basis points to 5.50% with immediate effect. This is the RBI's third repo rate cut since February and will further reduce the interest burden for borrowers but will also cut the interest earned on savings by depositors. Separately, the RBI also decided to reduce the cash reserve ratio (CRR) by 100 basis points (bps) over the course of this year to provide sufficient and durable liquidity to the banking system. This means that the percentage of deposits that banks must keep in reserve with the central bank has been cut, leaving more money available for lending. The cut in CRR would release primary liquidity of about ₹2.5 lakh crore to the banking system by December 2025. Besides providing durable liquidity, it will reduce the cost of funding of the banks, thereby helping in monetary policy transmission to the credit market, RBI Governor Sanjay Malhotra said in his statement. The CRR will be reduced to 3% of net demand and time liabilities (NDTL) in a staggered manner, with four cuts of 25 bps each taking effect from the fortnights beginning September 6, October 4, November 1, and November 29. One basis point is equal to 0.01%. 'This decision is in consonance with the objective of achieving the medium-term target for consumer price index (CPI) inflation of 4% within a band of +/- 2%, while supporting growth,' the RBI said in the monetary policy statement. The MPC believed that, despite global uncertainties, Indian economic activity will continue to maintain momentum in the financial year 2025-26, supported by private consumption and traction in fixed capital formation. Taking various factors into account, real GDP growth for 2025-26 has been maintained and projected at 6.5%, with first quarter (Q1) growth of 6.5%, Q2 at 6.7%, Q3 at 6.6%, and Q4 at 6.3%. The MPC also decided to change its policy stance from accommodative to neutral, leaving it free to raise repo rates if inflation trends change. 'After having reduced the policy repo rate by 100 bps in quick succession since February 2025, under the current circumstances, monetary policy is left with very limited space to support growth. Hence, the MPC also decided to change the stance from accommodative to neutral,' the Governor said. The Hindu's Editorials The Hindu's Daily Quiz The Census is set to be held after a gap of how many years? 12 years 10 years 8 years 16 years To know the answer and to play the full quiz, click here.
Time of India
an hour ago
- Time of India
'It could have gone nuclear': Trump again claims he 'stopped India-Pakistan war'; doubles down on trade angle
US President Donald Trump (PTI photo) US President Donald Trump on Friday once again claimed that he played a key role in stopping a possible war between India and Pakistan - a conflict he said might have gone nuclear if not for his intervention. Speaking to reports on Air Force One, Trump said he used trade as a tool to get both sides to halt hostilities immediately. "You know, I did something that people don't talk about, and I don't talk about very much, but we solved a big problem, a nuclear problem potentially with India and with Pakistan. I spoke to Pakistan, I spoke to India, they have really great leaders, but they were going at it, and they could have gone at it nuclear," US President said. He explained that both countries stopped their attacks after he warned them the US would suspend trade if the fighting continued. "Both nuclear countries, strong nuclear countries, and I talked about trade and said, 'We're not doing trade if you guys are going to be throwing bombs at each other.' They both stopped, and I stopped that war immediately. It was going much further, and hopefully, it would not go to nuclear, but it might have gone to nuclear. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Secure Your Child's Future with Strong English Fluency Planet Spark Learn More Undo In fact, it might have gone to nuclear in the next round, but we stopped it, and I'd like to commend the leaders of both countries, Pakistan and India. " Trump's version of events got a rare endorsement from Moscow. Russian President Vladimir Putin 's aide Yury Ushakov backed Trump's claim, saying his direct involvement helped end the conflict - something that even came up in a phone call between Trump and Putin. "The Middle East was discussed, as well as the armed conflict between India and Pakistan, which has been halted with the personal involvement of President Trump," Ushakov said. The US president's comments, however, stirred diplomatic pushback. Congress MP Shashi Tharoor , who is leading an all-party delegation to the US, said they addressed Trump's mediation claims directly with US Vice President JD Vance. "The meeting with Vice President Vance was outstanding, very good, very clear. I think we made our position amply clear on this question of mediation, and Vice President Vance fully understood our points," Tharoor said. Trump has made similar claims in the past, especially after India carried out Operation Sindoor -- precision strike on terror infrastructure in Pakistan and Pakistan-occupied Jammu & Kashmir (PoJK) on May 7, in retaliation for the Pahalgam terror attack. India later responded to Pakistani military aggression with airbase strikes. Eventually, tensions eased after Pakistan's Director General of Military Operations (DGMO) contacted his Indian counterpart and agreed to stop further action.
Hindustan Times
2 hours ago
- Hindustan Times
‘Defence may be the wrong word': Shashi Tharoor points at ‘China factor' in Pakistan conflict
Congress leader Shashi Tharoor said on Thursday that 81 percent of Pakistan's defence equipment comes from China, making the country an 'impossible factor' to ignore in the conflict with Islamabad. Tharoor, who is leading a parliamentary delegation to the US to expose Islamabad's nexus with terror after India's Operation Sindoor, said that New Delhi-Beijing relations were making good progress till last month's conflict with Pakistan. 'I'm not going to mince my words, but we are aware that China has immense stakes in Pakistan," PTI quoted Tharoor as telling the representatives of think tanks at the Indian Embassy in Washington DC. Tharoor pointed out that the largest single project under the Belt and Road Initiative (BRI) is the China-Pakistan Economic Corridor (CPEC), and that 81 percent of Pakistani defence equipment is from China. 'Defence may be the wrong word here. Offence in many ways……China is an absolutely impossible factor to ignore in what has been our confrontation with Pakistan,' Tharoor said. Shashi Tharoor told the gathering that India had seen good progress in its relationship with China after tensions since the 2020 Galwan Valley clashes. The Thiruvananthapuram MP added that during Operation Sindoor and the conflict with Pakistan, New Delhi saw a very different China in terms of its support for Islamabad, even on the UN Security Council. 'We have no illusions about what the challenges are in our neighbourhood, but I want to remind you all that India has consistently chosen a path of keeping open channels of communication, even with our adversaries. We have tried as much as possible to focus on development, on growth, on trade. Our trade with China is still at record levels. It's not that we are adopting a posture of hostility, but we would be naive not to be aware of these other currents around,' he said. The UN Security Council, on April 25, issued a press statement on the 'terrorist attack in Jammu and Kashmir' after the April 22 Pahalgam attack that killed 26 people, mostly tourists. The statement had condemned the attack in "the strongest terms' but did not mention The Resistance Front as Pakistan, which is a non-permanent member of the council, got it removed with China's help. 'The members of the Security Council underlined the need to hold perpetrators, organisers, financiers and sponsors of this reprehensible act of terrorism accountable and bring them to justice,' the press statement had said. Shashi Tharoor was asked about the Chinese military equipment that Pakistan used in the conflict during an earlier interaction at the Council on Foreign Relations. The delegation head said that when India saw what the Pakistanis were attempting to do using Chinese technology, for instance, the 'kill chain' that the Chinese specialise in, where the radar, GPS, planes and missiles are all linked together and they react instantly, 'we simply did things in a different way. Otherwise, we wouldn't have been able to hit' 11 Pakistani airfields, and "we wouldn't have been able to breach the Chinese-supplied air defences. 'So it's clear that assessments were taking place while the fighting was happening, and we were recalibrating our strategies in order to end as effectively as we were able to end,' Tharoor said.
