Gross FDI into India hit new record of $95 billion in FY26, but net inflows only $7.7 billion

📌 Summary:

• India's gross Foreign Direct Investment (FDI) inflows hit a record $94.53 billion in 2025-26, up 17% year-on-year, exceeding the earlier peak of $84.84 billion (2021-22) — per RBI data

• But net FDI was just $7.65 billion — higher than FY25's $959 million, yet well below earlier years

• Net FDI is gross FDI minus repatriation by foreign companies and overseas investment by Indian firms; both have risen — repatriation reached $53.58 billion in FY26 and Indian overseas FDI rose to $33.29 billion

• Weak net FDI has pressured the rupee, which neared 97/dollar before RBI intervention pulled it back to 95.69 (down 5% since the West Asia war began)

• The RBI's gross dollar sales were about $29.6 billion in March (the highest in 13 months) and $195.38 billion for FY26; net forex sales were $53.13 billion

• Foreign capital fled after the West Asia war began: FPI outflows of $13.6 billion (March), $7.56 billion (April) and $2.62 billion (May so far); FDI had briefly surged in February on the India-US interim trade deal that cut tariffs

🎯 UPSC Relevance: GS3 Economy — FDI trends, the gross-versus-net FDI distinction, the external sector and rupee stability, and the balance of payments.

📝 Prelims Facts:

• Gross FDI in FY26: $94.53 billion (a record); net FDI in FY26: $7.65 billion
• Previous gross FDI peak: $84.84 billion (2021-22)
• Net FDI = gross FDI minus repatriation by foreigners minus overseas FDI by Indian companies

🔑 Key Term: Net FDI — gross foreign direct investment adjusted for repatriated investment and outbound FDI by domestic companies; a truer measure of retained foreign capital.