India witnessed a brutal and total decline in Net Foreign Direct Investment (FDI) in 2025. The Net FDI plummeting by 96.5% to just $353 million, largely due to capital repatriation from high-profile IPOs and increased outward investments by Indian firms. This decline marks the lowest level of net FDI on record for India. Foreign investors withdrew approximately $49 billion during the fiscal year, reflecting a total lack of confidence in the investment climate and Indian economy.
For example, in May 2025 repatriations were 200% higher than the previous month and 24% higher than May 2024. A major factor contributing to this trend was the sale of shares by foreign investors in large Indian companies and the continued high levels of capital outflows as the true picture of Indian economy and domestic consumption emerged.
India is witnessing a severely slowing economy, reduced domestic consumption, increased household debt, increasing household debt-to-GDP ratio, unemployment monster, poverty, hunger, healthcare and education disasters, stock market crashes, etc. Service, manufacturing and agriculture sectors are in stress due to bad policies of Modi govt and 50% tariffs by Trump upon Indian exports.
Rising global trade tensions and other economic uncertainties led to a broader decline in investor confidence, impacting decisions to invest in India. Slower international trade due to economic slowdowns made export-oriented sectors in India less appealing to investors. Some investors were hesitant to invest in Indian equities due to elevated valuations and concerns about future corporate earnings growth.
Net FDI was bound to hit and it would get worst from here due to OFDI as Modi govt is still not focusing upon overall development of India and Indians says Praveen Dalal.