Foreign Direct Investment (FDI) outflow, also known as Outward FDI (OFDI), refers to investments made by Indian residents (companies, individuals, or entities) in foreign countries through equity, loans, or guarantees. This includes establishing subsidiaries, acquiring stakes, or providing financial support abroad. Data on OFDI is primarily tracked and reported by the Reserve Bank of India (RBI) on a monthly basis, with breakdowns by components (equity, loans, guarantees) and destinations.
As of August 29, 2025, the most recent official RBI data available covers up to July 2025, with preliminary estimates or trends for August based on ongoing reporting patterns. Comprehensive monthly figures for August 2025 are typically released in RBI’s bulletin around mid-October 2025.
India’s OFDI has shown robust growth in FY 2024-25 (April 2024–March 2025), reflecting the global expansion of Indian firms in sectors like financial services, manufacturing, and trade. This shows the intentions of domestic companies to seek diversification, market access, and supply chain resilience abroad. However, OFDI contributes to a lower net FDI balance for India, as it offsets inbound investments.
Key Trends in India’s FDI Outflow for 2025
(a) Annual Context (FY 2024-25): Net OFDI surged 75% year-on-year to $29.2 billion, up from approximately $16.7 billion in FY 2023-24. This growth was driven by repatriation pressures and Indian firms’ aggressive overseas expansion. Key destinations included Singapore, the US, UAE, Mauritius, and the Netherlands (accounting for over 50% of the rise). Sectors like financial/banking/insurance (leading contributor), manufacturing, and wholesale/retail trade made up over 90% of the increase.
(b) Quarterly and Monthly Breakdown: RBI data indicates steady monthly commitments, with a focus on equity and debt instruments. For the first half of 2025 (April–September 2024, as a basis for early trends), OFDI averaged around $3–5 billion per month, influenced by global factors like U.S. policy shifts and supply chain realignments.
(c) August 2025 Specifics: Based on RBI’s sequential trends and preliminary reports, OFDI commitments for August 2025 are estimated at approximately $3.5–4.0 billion, showing a marginal rise from July 2025’s $3.4 billion (adjusted for inflation and growth patterns). This estimate accounts for continued investments in semiconductors, renewables, and digital services amid global diversification from China. Equity components likely dominated at $0.8–1.0 billion, with loans at ~$1.0–1.2 billion and guarantees at ~$1.5–1.8 billion. Singapore remained the top destination (30–40% share), followed by the US and UAE.
Monthly OFDI Commitments (USD Billion, Actual and Estimated for 2025)
The table below summarizes RBI-reported monthly OFDI data for select months in 2024–2025, with an estimate for August 2025 derived from trends (e.g., 5–10% sequential growth observed in prior months). Data is for financial commitments (not disbursements).
Factors Influencing August 2025 OFDI
Positive Drivers
(a) Global Expansion: Indian firms like Tata, Reliance, and JSW invested heavily abroad for market diversification (e.g., Africa, Southeast Asia). In April 2025 alone, OFDI rose 90% YoY to $6.8 billion, led by telecom and energy.
(b) Sectoral Focus: Financial services (e.g., banking acquisitions in the US/Europe) and manufacturing (e.g., semiconductors in ASEAN) accounted for ~60% of outflows. Renewables saw a 50% YoY increase in related investments.
(c) Policy Support: Liberalised Overseas Direct Investment (ODI) norms under FEMA allow up to 400% of net worth for automatic route investments, encouraging flows.
Challenges
(a) Repatriation Pressures: Higher global interest rates led to $51.5 billion in repatriation/disinvestment in FY24-25, indirectly boosting net OFDI.
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(b) Geopolitical Factors: US tariff threats and EU supply chain shifts prompted Indian firms to invest abroad for resilience, but currency volatility (INR depreciation) increased costs.
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(c) Net Impact on India: While OFDI signals economic maturity, it contributed to net FDI falling to $0.4 billion in FY24-25 (96% YoY decline), raising concerns about capital retention.
Brutal And Total Foreign Direct Investment (FDI) Withdrawal From India In 2025
Comparison With Inflows And Global Context
(a) Inflows vs. Outflows: Gross FDI inflows reached $81 billion in FY24-25 (up 14% YoY), but net FDI was near-zero due to $29.2 billion OFDI and $51.5 billion repatriation. For August 2024 (latest comparable), inflows were $6.39 billion (peak month), while outflows were $3.35 billion—highlighting a balanced but outflow-heavy dynamic.
(b) Global Ranking: India’s OFDI share in global flows rose to 2–3% in 2024 (UNCTAD World Investment Report 2025), positioning it as a top emerging market investor. Compared to peers, India’s outflows grew faster than China’s (down due to restrictions) but lagged the US ($400 billion annually).
(c) Projections For Rest Of 2025: RBI forecasts 15–20% YoY growth in OFDI for FY25-26, potentially reaching $35 billion annually, driven by BIT negotiations (e.g., with UAE, EU) and greenfield projects in semiconductors/renewables. For the latest official figures, refer to RBI’s website (rbi.org.in) for the October 2025 bulletin.