Download Our App
The government is considering a proposal to ease foreign direct investment (FDI) norms for downstream investments to boost overseas fund inflows and create jobs, sources said. The proposal is currently under inter-ministerial discussions, they said. The government has in recent years undertaken a series of reforms aimed at liberalising the country's FDI policies with the goal of stimulating economic growth and encouraging foreign capital inflows.
The Reserve Bank of India’s (RBI) proposed overhaul of foreign investment rules last week is a welcome attempt to simplify a regulatory architecture that has grown increasingly complex through years of amendments, clarifications, and overlapping requirements. By replacing the existing framework with a more consolidated, principles-based regime, the draft seeks to make it easier for foreign investors to understand how investments are classified, structured, and regulated. Greater clarity on the distinction between foreign direct and portfolio investment, ownership and control, downstream investment, and other cross-border transactions should reduce uncertainty and compliance costs.
The government on Thursday allowed Foreign Direct Investment (FDI) in the inventory-based model of e-commerce for exports. This relaxation will allow large international e-commerce platforms to boost exports from India through this route. “In order to facilitate greater exports through easier and increased access to global markets by Indian sellers, the extant FDI Policy has been reviewed and it is decided that the restrictions on the inventory-based model of e-commerce shall not apply in case of exports of domestically manufactured and/or produced goods/products,” Press Note 3 amending the FDI policy said.
India's net FDI inflows will likely rebound in FY27 reaching USD 15 billion, supported by healthy gross inflows and moderation in growth of repatriation outflows amid policy measures, as per a report by CareEdge Ratings. The report noted, India's capital account closed FY26 on a weak note, with the surplus narrowing sharply to USD 1.9 billion from USD 16.6 billion in FY25 and USD 89.5 billion in FY24. Also, net FDI remained subdued at USD 6.9 billion in FY26 -- well below the five-year FY16-FY20 average of USD 35.1 billion. On the other hand, FPI outflows of USD 16.6 billion, driven by geopolitical uncertainty, added further pressure.
The country should adopt an 'India-Plus Contribution Scorecard' to promote foreign direct investment (FDI) by rating investors on measurable economic contributions such as productivity, exports and technology transfer, while maintaining stringent national security safeguards, a report has suggested. With the Indian economy crossing USD 4 trillion, the country must develop the institutional capacity to pursue rooted, contribution-generating investment, the report prepared by VeK Research and Pahle India Foundation said.
United Nations, Foreign Direct Investment inflows to India increased by 44 per cent in 2025 to USD 39 billion, according to the UN, which said the country continued to strengthen its position as a major investment destination. The 2026 World Investment Report, released Tuesday by United Nations Trade and Development (UNCTAD), said global foreign direct investment showed resilience in 2025, but the recovery remained fragile. FDI flows rose by 6 per cent to USD 1.6 trillion. Inflows increased by 11 per cent in developed economies and by 2 per cent in developing economies.
There is a growing discussion on revamping India’s bilateral investment treaties (BITs). In the FY26 Budget speech, the FM had announced that the BIT model will be modified to make it more investor-friendly. Reji K Joseph traces the background and explains why the debate has now gained fresh urgency What are BITs? Countries aim to attract FDI since it comes as a package of capital, technology, managerial expertise, and linkage. To avoid risks of arbitrary actions by host countries, home and host countries have developed mechanisms to protect foreign investors. BITs are the most widely used such mechanism. Foreign investors who are adversely affected by host country actions can seek compensation for damages in international tribunals. Sometimes investment provisions can be a part of bilateral and multilateral trade agreements. All these together are called international investment agreements (IIAs).
Despite the war in West Asia, foreign direct investment (FDI) inflows rose sharply in both gross and net terms in April this year, bucking the trend of heightened outflows by foreign portfolio investors. Gross FDI inflows rose to $15.3 billion in April this year compared with $9.3 billion in the same month last year. Similarly, net FDI inflows rose to $6.6 billion from around $1.6 billion during the same period, the Reserve Bank of India’s (RBI) monthly bulletin for June shows. In fact, net FDI remained negative for five consecutive months from August to December last year due to a rise in repatriation and outward FDI.
India's total outward foreign direct investment commitments declined 49.02 per cent month-on-month to USD 4.49 billion in May 2026 from USD 8.84 billion, mainly due to lower equity investments, loans, and guarantees issued by Indian companies, according to RBI data. However, total financial commitments by Indian entities under overseas investment increased 34.6 per cent year-on-year in May 2026 from USD 3.34 billion, data showed. Equity investments abroad dropped sharply to USD 1,247.82 million in May from USD 3,537.35 million in April, marking a decline of about 64.72 per cent. Overseas loans extended by Indian companies also declined to USD 632.12 million in May from USD 1,299.69 million in April. Guarantees issued, which formed the largest component of overseas commitments, fell to USD 2,608.83 million in May from USD 3,999.79 million in April, declining around 35 per cent. However, it increased from USD 1,122.37 million in May 2025.
India attracted cumulative Foreign Direct Investment (FDI) inflows of USD 843 billion between 2014-15 and 2025-26, registering a 169 per cent increase over the preceding 12-year period, a commerce and industry ministry official said on Wednesday. Despite global economic uncertainties, the country recorded a historic USD 94.53 billion FDI in 2025-26, with over 90 per cent of equity inflows coming through the automatic route, said Sumeet Jarangal, joint secretary in the department for promotion of industry and internal trade (DPIIT). He highlighted that flagship initiatives such as Make in India and the Production Linked Incentive (PLI) Scheme have translated investments into manufacturing strength.
India's total outward foreign direct investment commitments declined 49.02 per cent month-on-month to USD 4.49 billion in May 2026 from USD 8.84 billion, mainly due to lower equity investments, loans, and guarantees issued by Indian companies, according to RBI data. However, total financial commitments by Indian entities under overseas investment increased 34.6 per cent year-on-year in May 2026 from USD 3.34 billion, data showed. Equity investments abroad dropped sharply to USD 1,247.82 million in May from USD 3,537.35 million in April, marking a decline of about 64.72 per cent.
Union Commerce and Industry Minister Piyush Goyal said on Sunday that India remains open to investments from China and other neighbouring countries in desirable sectors, but there is “absolutely no chance” that the Narendra Modi government will join the Regional Comprehensive Economic Partnership (RCEP). Speaking at the Financial Express Best Banks Awards 2026 in Mumbai, Goyal defended India’s investment screening framework and launched a sharp attack on the previous Congress-led government for taking India into RCEP negotiations. Responding to a question on whether India should review its approach towards Chinese investments as the trade deficit with China continues to rise, Goyal said India does not oppose investments from China as long as they do not pose risks to the economy or lead to opportunistic acquisitions of strategic assets. “We encourage investments from all over the world. We have no problem also on Chinese investments as long as they are in desirable segments, as long as they are not coming in as an opportunistic takeover of an asset which may at some point of time be underpriced,” Goyal said.
Union Commerce and Industry Minister Piyush Goyal said on Sunday that India remains open to investments from China and other neighbouring countries in desirable sectors, but there is “absolutely no chance” that the Narendra Modi government will join the Regional Comprehensive Economic Partnership (RCEP). Speaking at the Financial Express Best Banks Awards 2026 in Mumbai, Goyal defended India’s investment screening framework and launched a sharp attack on the previous Congress-led government for taking India into RCEP negotiations. Responding to a question on whether India should review its approach towards Chinese investments as the trade deficit with China continues to rise, Goyal said India does not oppose investments from China as long as they do not pose risks to the economy or lead to opportunistic acquisitions of strategic assets.
The Foreign Direct Investment (FDI) equity inflows into the country increased 18% on year to $ 58.8 billion in 2025-26 with major boost provided by investors in computer software and hardware sectors, an analysis by the Department for Promotion of Industry and Internal Trade (DPIIT) said. Overall FDI last year – which included reinvested earnings and other capital – was up 17% on year to $ 94.5 billion. In the January-March quarter the FDI equity investments grew 17.5% on year to 10.9 billion. The net investment by Foreign Portfolio Investors (FPI) was in the negative. They pulled out $ 15.5 billion from India in 2025-26.
