RBI data shows Indian firms expanding their international investment footprint as overseas direct investment outpaces foreign capital inflows
PRAVASISAMWAD.COM
Indian companies’ overseas direct investments rose 40.8 per cent in rupee terms in the financial year 2025-26, significantly outpacing the growth in foreign direct investment (FDI) into the country, according to provisional data released by the Reserve Bank of India (RBI).
The increase has narrowed the gap between foreign investments entering India and investments made abroad by Indian businesses, reflecting the growing international presence of domestic companies.
The RBI’s annual census on foreign liabilities and assets, released on November 6, showed that the ratio of inward FDI to overseas direct investment (ODI) declined to 4.2 times at the end of March 2026, from 5.5 times a year earlier.
Outstanding inward direct investment in India increased 8.5 per cent to Rs 70.72 lakh crore at the end of March 2026, compared with Rs 65.17 lakh crore in the previous year. In contrast, Indian entities’ overseas direct investments rose to Rs 16.71 lakh crore from Rs 11.87 lakh crore.
In dollar terms, inward direct investment stood at $747.13 billion, while overseas direct investment was valued at $176.59 billion
The census covered 43,123 Indian entities reporting FDI and/or ODI as of March 2026. Unlisted entities accounted for 41,814 of these companies, representing approximately 97 per cent of the total.
The United States remained the largest source of outstanding FDI into India, accounting for 16.5 per cent of the total. Mauritius followed with 14.5 per cent, Singapore with 13.7 per cent and the United Kingdom with 10.8 per cent.
Singapore, the United Arab Emirates and the US together accounted for more than half of India’s overseas direct investments.
Sector-wise, manufacturing represented 50.1 per cent of outstanding FDI equity at market value, while services accounted for 45 per cent.
The RBI also reported an 11.9 per cent annual increase in other investment liabilities involving unrelated non-residents, including trade credit, loans and deposits. Other investment assets with unrelated non-residents rose 16.1 per cent.
The central bank cautioned that changes in outstanding foreign assets and liabilities may differ from balance of payments flows, as they also reflect valuation changes arising from movements in prices and exchange rates.
The data highlights the increasing international investment activity of Indian companies alongside continued foreign capital inflows into the domestic economy.
