The gross Foreign Direct Investment (FDI) inflows maintained robust momentum in FY25. (AI image)

Foreign direct investment (FDI) into India was reported at $8.8 billion in April, showing a 22% increase compared to the previous year’s figures. This surge assisted the Reserve Bank of India in strengthening India’s foreign exchange reserves whilst managing rupee stability.The gross FDI inflows maintained robust momentum in FY25, showing an increase of approximately 14% to $81 billion compared to $71.3 billion in the previous year. The net FDI inflows, however, decreased to $0.4 billion from $10.1 billion, attributed to increased repatriation.The country’s forex reserves reached $698.95 billion by June 13, an improvement from $665.396 billion on March 28. The RBI engages in dollar purchases to enhance reserves, whilst selling US currency to prevent sharp depreciation of the rupee, according to an ET report.The non-resident deposit inflows experienced a decline, with banks recording $751 million in the fiscal year’s initial month, down from $1.078 billion in the corresponding period last year, as revealed in the central bank’s June bulletin.Indian companies increased their net external commercial borrowing to $2.8 billion in April, significantly higher than $0.5 billion recorded in the same month last year.“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,” the central bank said.“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,” RBI said in the monthly report.Regarding financing aspects, Foreign Portfolio Investment (FPI) to India witnessed a considerable reduction to $1.7 billion in FY25, following profit-taking activities by foreign portfolio investors in the equity markets.The non-resident deposits showed improved performance with net inflows reaching US$ 16.2 billion in 2024-25, surpassing the previous year’s figure of US$ 14.7 billion.