India continues to remain an attractive investment destination, says RBI governor
India continues to draw strong foreign investor interest, with gross foreign direct investment (FDI) inflows rising 14 per cent to USD 81 billion in FY2024-25,
Reserve Bank of India
Governor Sanjay Malhotra said Friday, saying that India continues to be an attractive investment destination.
The rise in gross FDI, from USD 71.3 billion a year ago, shows growing confidence in India's economic fundamentals. However,
net FDI inflows
moderated to USD 0.4 billion in 2024-25 from USD 10.1 billion a year ago, governor said that it is sign of a maturing economy where capital inflows and outflows coexist, offering investors both entry and exit flexibility.
'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,' said governor.
Other capital flows also increased. Net inflows through external commercial borrowings (ECBs) surged to USD 18.7 billion in FY2024-25, compared with just USD 3.6 billion the previous year. Non-resident deposits recorded higher net inflows of USD 16.2 billion, up from USD 14.7 billion.
Despite recent outflows in foreign portfolio investment (FPI), USD 2.1 billion in FY2025-26 until June 4, the country's external buffers remain solid.
Foreign exchange reserves
stood at USD 691.5 billion as of May 30, sufficient to cover over 11 months of goods imports and nearly 96 per cent of external debt.
Also the current account deficit remained contained at 0.7 per cent of GDP in FY2023-24. External debt-to-GDP rose marginally to 19.1 per cent as of December 2024, from 18.5 per cent in March 2024.
'Overall, India's external sector remains resilient as key external sector vulnerability indicators continue to improve,' the governor said. 'We remain confident of meeting our external financing requirements.'
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