India's Investment Appeal: A Beacon of Economic Maturity

India continues to attract strong foreign direct investments, despite fluctuating net FDI inflows and lowered foreign portfolio investments. With rising repatriations and a stable current account deficit, the country's external sector remains resilient. India's robust trade, strong services exports, and foreign exchange reserves highlight its economic maturity.

India stands out as a prime investment destination, even amidst economic flux, as highlighted by Reserve Bank Governor Sanjay Malhotra's recent remarks. Foreign direct investment (FDI) inflows surged by 14% in 2024-25, reaching USD 81 billion compared to the previous year, despite net FDI inflows experiencing a notable drop.

Foreign portfolio investment (FPI) experienced a decline, plummeting to USD 1.7 billion as investors capitalized on equity profits. Governor Malhotra attributed the moderation in net FDI to increased repatriation and net outward FDI, while applauding the 14% increase in gross FDI as evidence of India's enduring investment appeal.

As of late May 2025, India's foreign exchange reserves stood robust, covering over 11 months of goods imports. The resilience of India's external sector is underscored by its ability to counterbalance trade deficits through net services and remittance surpluses.

(With inputs from agencies.)