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Net FDI declines to $6.95 billion in FY26 due to higher foreign investor repatriation, govt tells Parliament

Net foreign direct investment (FDI) has declined in recent years primarily due to increased repatriation by foreign investors and rising Overseas Direct Investment (ODI) outflows, the government informed Parliament on Tuesday, while noting that net FDI recovered to USD 6.95 billion in FY26 from USD 960 million in FY25. In a written reply to the Rajya Sabha, Minister of State for Finance Pankaj Chaudhary, citing RBI data, said net FDI stood at USD 27.99 billion in FY23, moderated to USD 10.13 billion in FY24, fell to USD 960 million in FY25, and recovered to USD 6.95 billion in FY26. However, in gross terms, India recorded a record FDI inflow of USD 94.84 billion in FY26, up from USD 80.61 billion in FY25. The decline in net FDI in recent years recovered to USD 6.95 billion in FY26 from USD 0.96 billion in FY25. The recent trend in net FDI inflows is associated with increased repatriation/disinvestment by foreign investors and rising Overseas Direct Investment (ODI) outflows, Chaudhary said. ALSO READ: Nirmala Sitharaman Urges Income Tax Officials to End Bureaucratic Delays for Taxpayers He added that higher ODI outflows, following the liberalised ODI rules notified in 2022, are helping Indian companies expand their global presence and compete more effectively in international markets, strengthening the Indian economy over the long term. According to the minister, the growing trend of repatriation also reflects India's ability to generate strong returns for foreign investors, enhancing its reputation as a dependable investment destination. Replying to another question, Chaudhary said the government has been actively implementing measures to contain inflation and reduce its impact on consumers, particularly the poor and middle class. He said the government continuously monitors prices of essential commodities and undertakes fiscal, administrative and supply-side interventions to keep inflation under control. Daily price monitoring is supported by regular reviews of the Inter-Ministerial Committee (IMC), which recommends measures, including import-export policy interventions, to improve domestic availability of essential goods. Among the steps taken are increasing buffer stocks of essential food items, strategic sale of government-procured grains in the open market, facilitating imports, restricting exports during shortages, imposing stock limits on select commodities to improve market supply, and selling essential food items under the Bharat brand at subsidised prices. The minister also highlighted the free distribution of food grains to nearly 81 crore beneficiaries under the National Food Security Act and the increase in disposable incomes through income tax exemptions for annual earnings of up to Rs 12 lakh, or Rs 12.75 lakh for salaried individuals after the standard deduction. ALSO READ: Why investors are suddenly fleeing Indonesia He further said the rationalisation of Goods and Services Tax (GST) rates on commonly used products, including food items, household goods, medicines, medical equipment, agricultural products and certain automobiles, has also helped improve affordability for households. Responding to a separate question, Chaudhary said the average monthly exchange rate of the Indian rupee against the US dollar was Rs 59.3 per USD in May 2014, compared with Rs 95.6 per USD in May 2026. The rupee further weakened to Rs 96.57 per USD on July 22, 2026. He reiterated that the value of the rupee is market-determined, with no fixed target or trading band, and said the Reserve Bank of India closely monitors the foreign exchange market and intervenes whenever necessary to curb excessive volatility.