India recorded record gross foreign direct investment inflows in FY26, but the amount of money that stayed in the country was far smaller. Reports put gross FDI at about $94.84 billion for the year, up from $80.61 billion in the previous year, while net FDI was only $7.65 billion. One analysis of the same data gives the gross figure as $94.53 billion, so the exact total differs by source, and the net figure of $7.65 billion is the same in both.
The difference between the two numbers is the central point. Net FDI is gross FDI minus the money taken back out by foreign investors, known as repatriation or disinvestment, and minus the investments that Indian companies make abroad, known as outward direct investment. The government has said that the recent decline in net FDI is due to increased repatriation by foreign investors and rising outward investment.
One analysis puts repatriation at $53.58 billion in FY26, the highest in at least three years, and describes the growth in gross inflows at 17% over the previous year. That figure is from a secondary source, and the outward investment amount was not given in the same analysis, so readers should check the official release from the Reserve Bank of India for a full breakdown.
Why does repatriation rise? Foreign investors take money out when they sell stakes, when companies pay dividends and when private equity and venture funds exit their investments through public offerings. Exits by existing investors, for example through public offerings, can also take money out. Indian companies also invest abroad for acquisitions and to build overseas operations, which counts against net FDI.
The same report highlighted pressure in other flows. It noted that foreign portfolio investors pulled out $13.6 billion in March 2026 and $7.56 billion in April, and that the Reserve Bank sold $29.6 billion in foreign exchange in March, the highest in 13 months. Those numbers are not FDI, but they show the stress on the capital account this year.
There is also a recent data point on the inflow side. A report in August said FDI inflows reached $30.7 billion in the first quarter of FY27, which it called a 15-year high. This suggests that the headline numbers are continuing to rise, although the same question about net flows will apply.
The distinction matters for how the figures are read. A record gross number shows that foreign companies still want to invest in India, and that is a positive. A low net number shows that the amount of new foreign capital that remains to finance the economy is much smaller, and that is relevant at a time when the rupee is weak and the current account faces higher oil costs.
For readers, the practical advice is to look at the gross, repatriation and outward investment figures together. No single number tells the whole story, and the official data are revised. The figures in this article come from secondary reports and should be checked against the primary release.
India’s FDI story in FY26 is therefore one of strong headline inflows and weak retention, a pattern that the government attributes to repatriation and outward investment, and that analysts are watching closely.
Featured image: The Jio World Centre in Mumbai (file photo; a stand-in image for a business district, not specific to the FDI data). Photo by DesiBoy101, licensed under CC BY 4.0, via Wikimedia Commons.