India Sees $8.8 Billion Surge in FDI Inflows in April, Fueled by Manufacturing and Services Sectors
By Ankur Chandra | Published at: Jun 26, 2025 11:56 AM IST
New Delhi, June 26 – India experienced a big increase in foreign direct investment (FDI) inflows. In April 2025, gross FDI reached $8.8 billion, up from $5.9 billion in March and $7.2 billion in April 2024. This gain shows that investors are becoming more confident, which helps the Reserve Bank of India’s attempts to increase currency reserves and stabilise the rupee in a world that is always changing.
Strong Sectoral Momentum: Manufacturing and Business Services Lead
Almost half of the total FDI that came into the country in April went to the manufacturing and business services sectors. India was also the 16th most popular place in the world for foreign direct investment (FDI) and the best place for new digital economy businesses to invest in the Global South, bringing in $114 billion between 2020 and 2024. The RBI warned that global uncertainties could slow down future investment, even though there were strong inflows. It also told policymakers to find a balance between encouraging GDP and keeping inflation in check.
Monthly FDI Comparison
| Period | Gross FDI Inflows ($ Billion) |
|---|---|
| April 2025 | 8.8 |
| March 2025 | 5.9 |
| April 2024 | 7.2 |
FPI Momentum Supported by Geopolitical Easing
Foreign Portfolio Investment (FPI) continued to show strength, recording net inflows of $1.7 billion in May 2025, primarily in equities. This was buoyed by:
- The India–Pakistan ceasefire,
- US–China trade truce, and
- Robust Q4 FY25 corporate earnings.
Sector-Wise FPI Highlights
Top sectors attracting FPI included:
- Telecommunications
- Services
- Capital Goods
The debt segment, which had seen outflows in the prior month, witnessed a pause in net withdrawals, even as the India–US bond yield differential stayed below 2%.
NRI Deposits and Forex Reserve Boost
In April 2025, Non-Resident Indian (NRI) deposits went up to $165.43 billion from $164.68 billion in April 2024. At the same time, an increase in forex reserves made the Indian rupee stronger and gave the country enough of a cushion to cover more than 11 months’ worth of imports, showing that the country’s external balance sheet is strong.
| Metric | Value in April 2025 | Value in April 2024 |
|---|---|---|
| NRI Deposits ($ Billion) | 165.43 | 164.68 |
| Import Coverage (Months) | >11 | – |
Outlook
India’s strong performance in foreign direct investment (FDI) and foreign portfolio investment (FPI) is likely to continue into FY26. This is because sectors like manufacturing and services are still growing. The rise in FDI to $8.8 billion in April 2025 shows that investors trust the country’s economic path and believe that government strategies like Make in India and the focus on boosting the digital economy are working.
REF: https://www.newsonair.gov.in/indias-fdi-inflows-jump-to-8-8-billion-dollars-in-april/
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