India experienced a significant increase in foreign direct investment (FDI) inflows, hitting $8.8 billion in April 2025, as reported by the Reserve Bank of India (RBI) in its monthly bulletin. This surge marks a notable rise from $5.9 billion in March 2025 and $7.2 billion in April 2024. The spike reflects a growing global trust in India’s macroeconomic stability and sectoral resilience, particularly in manufacturing and business services, which contributed to almost half of the FDI.
Key Highlights from RBI Bulletin
FDI Inflows
- April 2025: $8.8 billion
- March 2025: $5.9 billion
- April 2024: $7.2 billion
Sectors Receiving FDI
- Manufacturing and Business Services: Approximately 50% of total inflows
- Telecommunication, Capital Goods, and Services also prominent
India’s Global Position
- Ranked 16th globally in FDI inflows
- Secured $114 billion in greenfield investments in digital economy sectors (2020–2024)
- Highest greenfield investment among Global South countries
Foreign Portfolio Investment (FPI)
- Net FPI inflows in May 2025: $1.7 billion
- Driven by India-Pakistan ceasefire, US-China trade truce, strong Q4 corporate earnings (FY 2024–25)
Debt Market Activity
- Previous month saw outflows
- May 2025: Outflows paused despite low yield differential (<2%) between India and US bonds
NRI Deposits
- Total NRI deposits in April 2025: $165.43 billion
- FCNR(B) Deposits grew by 9% year-on-year
Exchange Rate & Forex Reserves
- Rupee appreciated by 0.4% vs. US dollar in May 2025
- Forex reserves sufficient to cover 11+ months of imports
Key Takeaways for Competitive Exams
India’s FDI inflows surged to $8.8 billion in April 2025, showcasing the country’s growing appeal to foreign investors. The rise in FDI is attributed to various factors such as macroeconomic stability, sectoral resilience, and global confidence in India’s economy. Understanding these trends is crucial for competitive exams to stay updated on current economic developments.
