India’s FDI Soars to $6.5B in April-May 2026

India’s net foreign direct investment (FDI) saw a substantial increase, reaching $6.5 billion during April and May 2026. This figure nearly tripled from the $2.5 billion recorded in the same period of the previous year, as reported by the Reserve Bank of India (RBI).

The Reserve Bank of India’s July bulletin highlighted this growth, attributing it to enhanced global confidence in the Indian economy. This surge occurred amidst ongoing international market volatility, demonstrating India’s attractiveness to foreign capital.

Understanding the FDI Surge

The primary driver behind this significant increase was a rise in gross inward foreign direct investment. This inflow was coupled with a noticeable decrease in the repatriation of funds, contributing to the higher net FDI.

• Gross inward FDI reached $21.4 billion.
• Key contributors from Japan, Singapore, and Mauritius accounted for 74% of total equity investments.

Portfolio Investment and Market Management

Beyond direct investments, foreign portfolio investment also demonstrated positive momentum in recent months. The nation attracted $3.1 billion between June and July 20 through this channel.

This positive shift in portfolio inflows is linked to recent policy updates within the debt market. A temporary reduction in global geopolitical tensions also played a role, with investments distributed across both equity and debt segments.

RBI’s Currency Intervention

The Reserve Bank of India remains actively involved in managing the foreign exchange market to maintain stability. The central bank reported net sales of $6.104 billion in the spot currency market during May.

This marked the third consecutive month of such intervention, indicating the RBI’s consistent efforts to manage rupee fluctuations. The central bank emphasized its robust foreign exchange reserves as a strong buffer.

• Reserves cover over 10 months of imports.
• They also cover a significant portion of India’s external debt.

These substantial reserves ensure liquidity and stability within the Indian financial system, providing confidence in the nation’s economic resilience.