India’s gross FDI inflows rose 13% to $90.8 billion in January 2026, but net FDI remains near all-time lows. Morgan Stanley points to surging profit repatriations and increased outward investment as key drivers, leaving net inflows around $0.5 billion even as gross equity flows hit a three-year high.
RBI Governor Sanjay Malhotra told financial leaders in New York that the central bank is closely monitoring short-term economic fluctuations, including FDI outflows. He outlined reforms to strengthen foreign investment and deepen market integration, while pointing to India’s low inflation and strong foreign exchange reserves as proof of resilient fundamentals.
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South Korean President Lee Jae Myung’s New Delhi visit highlights India’s push to pull in large-scale foreign direct investment in advanced manufacturing and technology. Talks centered on deepening capital flows for priority sectors like semiconductors, shipbuilding, and energy, as both sides look to ride global supply-chain shifts and position India as a top investment destination.
India’s thriving IPO market is helping global investors lock in major exits, but it’s also squeezing the rupee. As PE and VC funds repatriate returns, net FDI has fallen sharply, increasing vulnerability to shifting capital flows. Analysts say the current churn looks like stress, yet it could also be the beginning of a more mature, stable capital cycle by FY27.
Refurbished electronics firm Grest has secured strategic early-stage FDI from Japan’s ICMG, marking a notable cross-border vote of confidence for India’s recommerce market. The move lands as global investors and consumers increasingly look to refurbished devices, with industry forecasts pointing to strong growth for used smartphones.
RBI data shows select FDI companies in India saw net sales growth moderate to 8.7% in FY25, down from 9.4% in the prior year. Services sales rose slightly, but manufacturing growth decelerated. Operating profit growth also slipped to 10.7% as companies absorbed higher expenses, signaling pressure on margins despite steadier demand.
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India has eased parts of its foreign direct investment framework, allowing companies to offer ESOP stock options to employees in China, Nepal, and Hong Kong. At the same time, NRIs and expats located in these regions can invest directly in Indian stocks. The adjustment to rule PN-3 is designed to make hiring and talent management easier, especially for firms with overseas teams.
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