Why in News?
India’s Net Foreign Direct Investment (FDI) rose to $6.6 billion in April 2026, the highest level since May 2021, driven by a sharp increase in gross FDI inflows.
Key Highlights
- Net FDI: $6.6 billion in April 2026, up from $917 million in March 2026.
- Gross FDI Inflows:$15.3 billion, the highest since at least March 2021.
- Increased 65% year-on-year.
- Increased 131% over March 2026.
- April inflows alone accounted for over 16% of total FDI received in FY 2025-26.
Major Source Countries
- Japan, Singapore, and Mauritius
- Together accounted for more than 75% of FDI inflows.
Outward FDI
- Gross outflows: $8.7 billion (up 13.7% YoY).
- Outward FDI by Indian companies: $4.8 billion, the highest on record since at least March 2021.
- Around 80% of outward FDI was directed to United States and Cayman Islands
- Major sectors Financial and insurance services, Business services, and Manufacturing
Significance
- Marks a strong recovery after six consecutive months of negative net FDI up to February 2026.
- Reflects renewed investor confidence and stronger capital inflows into the Indian economy.
Foreign Direct Investment (FDI)
- Investment by a foreign entity in a business located in another country with a lasting interest and management control (generally 10% or more equity ownership).
- Includes Greenfield investments, Brownfield investments, and Reinvested earnings
FDI vs FPI
- FDI: Long-term investment with management control.
- FPI (Foreign Portfolio Investment): Investment in financial assets without management control; generally more volatile.
[2021] Consider the following:
1. Foreign currency convertible bonds
2. Foreign institutional investment with certain conditions
3. Global depository receipts
4. Non-resident external deposits
Which of the above can be included in Foreign Direct Investments?
[A] 1, 2 and 3
[B] 3 only
[C] 2 and 4
[D] 1 and 4