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Business Standard
2 days ago
- Business
- Business Standard
Lower net FDI due to repatriation signals mature market, says RBI governor
The sharp drop in net foreign direct investment (FDI) in FY25 was due to repatriation, which is a sign of a mature market where investors can enter and exit smoothly, RBI governor Sanjay Malhotra said while announcing the monetary policy decision on Friday. Net FDI flows moderated to $0.4 billion in FY25, down from $10.1 billion the previous year, data released by the RBI earlier this month showed. Gross FDI inflows remained strong, rising by around 14 per cent to $81.0 billion in 2024-25 from $71.3 billion a year earlier. 'It is germane to point out that this moderation [of net FDI] is on account of a rise in repatriation and net outward FDI while gross FDI actually increased by 14 per cent. 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,' Malhotra said. He also said external commercial borrowings (ECBs) and non-resident deposits witnessed higher net inflows compared to the previous year. Net inflows under ECBs to India increased to $18.7 billion during 2024-25 compared with $3.6 billion a year earlier. In April 2025, net ECB to India rose to $2.8 billion from $0.5 billion a year earlier. Non-resident deposits recorded a higher net inflow of $16.2 billion in 2024-25 compared with $14.7 billion a year earlier. '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,' he said. Foreign portfolio investment (FPI) to India dropped sharply to $1.7 billion in 2024-25, as foreign portfolio investors booked profits in equities. According to the RBI's State of Economy report, more than 60 per cent of gross FDI inflows in FY25 were in manufacturing, financial services, electricity and other energy, and communication services sectors. Singapore, Mauritius, the UAE, the Netherlands and the United States accounted for more than 75 per cent of the flows. Repatriation and disinvestment by those who made direct investments in India increased to $51.5 billion in FY25 from $44.5 billion in FY24 and $29.3 billion in FY23. Overseas investments made by Indian companies (outward FDI) increased to $29.2 billion in FY25 from $16.7 billion in FY24 and $14 billion in FY23. Singapore, the US, the United Arab Emirates, Mauritius and the Netherlands together accounted for more than half of the rise in outward FDI, the report said.
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Business Standard
14-05-2025
- Business
- Business Standard
ECB filings hit 72-month high of $11.04 bn in March, shows RBI data
Indian firms, including non-banking financial companies (NBFCs), filed proposals with the Reserve Bank of India (RBI) in March 2025 to raise $11.04 billion through external commercial borrowings (ECBs). This is the highest monthly filing in the last 72 months. Of this, the intent for fundraising through the automatic route amounted to $8.34 billion, and via the approval route, it was $2.69 billion, according to RBI data. Total ECB filing in FY25 was $61.18 billion, up from $48.81 billion in FY24 and $25.98 billion in FY23, showed data sourced by the Business Standard Research Bureau from RBI and Bloomberg. Among the prominent firms that filed intent in March 2025 with the RBI is JSW Steel Ltd, for $900 million, for refinancing of earlier ECBs. The funding from commercial banks has a maturity of 63 months. ONGC Videsh Ltd, state-owned entity in the business of crude petroleum and natural gas, filed for raising $450 million. It, however, did not specify the purpose. ONGC Videsh also filed an ECB intent for $150 million to make overseas investments in joint ventures and wholly-owned subsidiaries, RBI data showed. Mangalore Refinery and Petrochemicals Ltd, which is also a unit of state-owned ONGC, filed for ECB intent worth $500 million to refinance debt raised earlier through ECBs. The funding from commercial banks has a maturity of 65 months. Among finance companies, Power Finance Corporation Ltd filed an intent to raise around $250 million from banks through a loan having a five-year maturity. Muthoot Finance Ltd filed to raise $400 million for on-lending purposes. The principal repayment for ECBs stood at $25.8 billion during April-2024-February 2025. After adjusting for repayments, net ECB inflows were at $20.3 billion during this period. This is more than double the level recorded a year ago, according to the article State of Economy in RBI's monthly bulletin (April 2025).
