Synopsis : India saw net FDI inflows of $3.95 billion in April 2025, the highest in nearly three years, signaling revived investor confidence. Simultaneously, spending on overseas education dropped 21%, marking the ninth straight monthly decline.
April 2025 brought a wave of optimism for India’s economic outlook as net Foreign Direct Investment (FDI) surged to $3.95 billion, the highest in 35 months and more than double the inflows from April last year. According to data released by the Reserve Bank of India (RBI), this sharp rebound follows a dismal March, which saw net outflows of $438 million. On a gross basis, FDI inflows touched $8.80 billion, up 23% year-on-year and the strongest monthly figure in 39 months.
This growth is attributed largely to investments in manufacturing and business services, which collectively accounted for nearly half of the gross inflow figure, as per the RBI’s State of the Economy report. RBI economists noted that even though India saw modest net inflows of only $2.29 billion during FY 2024-25 — a 77% drop from the previous year — the recent surge signals renewed foreign interest and confidence in India's growth potential.
Interestingly, while inflows rose, repatriation by foreign investors fell sharply to $1.67 billion, down over 50% year-on-year and 36% lower than March. Despite the drop in April, total repatriation during FY 2024-25 grew by 16% to $51.49 billion — which the RBI attributes to a maturing market where foreign players are increasingly confident in entering and exiting with ease.
Indian outbound FDI also showed strength, rising 169% in April to $3.19 billion. Key sectors included electricity, gas, water, and financial services, with Singapore, Mauritius, and Germany emerging as top destinations for these investments.
However, amid this capital flow momentum, spending by Indian residents on overseas education fell significantly. Under the Liberalised Remittance Scheme (LRS), such remittances declined 21% year-on-year in April to $164 million—continuing a downward trend for the ninth consecutive month. Overall, remittances for foreign studies in the first four months of 2025 stood at $874 million, down 21% from a year earlier. The decline is partly linked to a sharp drop in US student visa issuance, which fell 38% in the first nine months of 2024.
In contrast, travel-related remittances under LRS rose 11%, pushing overall LRS outflows to $2.48 billion for April. Travel now makes up more than half of India’s total personal overseas remittances under the $250,000 annual cap allowed per person.
The RBI’s latest figures come just weeks after a World Bank report flagged a global dip in FDI into developing nations, falling to $435 billion in 2023, the lowest in nearly two decades. India’s April numbers appear to buck that global trend, reinforcing its position as a resilient and attractive investment destination.
Disclaimer : This article is for informational purposes only. It does not constitute financial advice. Please consult with a financial advisor for investment or regulatory decisions.
