India received $3.3 billion in net foreign direct investment (FDI) in August 2026, marking the third consecutive month of positive net inflows, according to the Reserve Bank of India’s October bulletin. The figure was significantly higher than the net outflow of $103 million recorded in August 2025.
Net FDI is the difference between foreign investment coming into India and money moving out through repatriation, disinvestment, or investment by Indian companies abroad. A positive figure means India received more long-term foreign investment than it sent out during the month.
Strong turnaround in FDI trend
FDI inflows exceeded outflows in seven of the last eight months, showing a clear improvement in investor confidence. This is a major reversal from the previous five-month period, when net FDI had remained negative.
In July 2026, net FDI inflows stood at $4.1 billion. Although August’s figure was lower than July’s, it still reflected continued strength in long-term foreign investment into India.
Why net FDI improved
The RBI said higher gross inward investment and a slowdown in outward FDI supported the improvement in net flows. In August, gross FDI inflows into India were about $11.5 billion, while repatriation and disinvestment by foreign investors stood at $3.8 billion.
Indian companies invested $3.4 billion abroad during the month. The moderation in outward investment helped keep the overall net FDI figure positive.
Five-month FDI performance
Between April and August of the current financial year, India’s net FDI inflows rose 44 per cent year-on-year to $13.8 billion, compared with $9.6 billion in the same period last year.
Gross FDI inflows during April-August increased to $54.9 billion from $45.6 billion a year earlier. These inflows include equity capital, reinvested earnings and other forms of capital.
During the same period, foreign investors repatriated or divested $23.4 billion, while Indian companies invested $17.7 billion overseas. Despite these outflows, India’s overall net FDI position remained strong.
Major sectors and sources
Financial services, communication services, computer services and manufacturing accounted for around 73 per cent of total FDI equity inflows during April-August 2026. This shows that foreign investors continue to focus on India’s services and manufacturing sectors.
Singapore, Japan, Mauritius, the United Arab Emirates and the United States were the major sources of inward FDI, together contributing around 81 per cent of total inflows.
Positive sign for the economy
The continued rise in net FDI is a positive signal for India’s economy, especially at a time when foreign portfolio investors have been selling Indian equities. Unlike portfolio investment, FDI usually represents long-term commitment in businesses, factories, technology and services.
Sustained FDI inflows can support job creation, industrial capacity, technology transfer and overall economic growth. The latest RBI data suggests that global investors continue to see India as an attractive long-term investment destination.
