Indian Firms Go Global: Overseas Investment Outpaces Foreign Inflows
India's outward direct investment grew by 40.8%, narrowing the gap with inward FDI to 4.2 times, according to the latest RBI census.
Indian entities are aggressively expanding their footprint across the globe. According to the latest census by the Reserve Bank of India (RBI), India's overseas direct investment (ODI) has grown at a significantly faster rate than the foreign direct investment (FDI) flowing into the country during the 2025-26 period.
This surge in outward capital has led to a notable shift in the investment balance. The ratio of inward FDI to outward investment has narrowed to 4.2 times as of March 2026, down from 5.5 times in the previous year, signaling that Indian companies are increasing the relative scale of their international ventures.
The Numbers: A Tale of Two Trends
The provisional results of the Census on Foreign Liabilities and Assets of Indian Direct Investment Entities reveal a stark contrast in growth percentages between domestic and foreign capital movements:
- Inward FDI: The outstanding value of foreign direct investment into India stood at Rs 70.71 lakh crore by the end of March 2026. This represents a growth of 8.5 per cent compared to the Rs 65.17 lakh crore recorded the previous year.
- Outward ODI: In contrast, the value of Indian investments abroad skyrocketed to Rs 16.71 lakh crore, up from Rs 11.86 lakh crore. This marks a massive increase of approximately 40.8 per cent.
Who is Investing and Where?
The RBI's census tracked 43,123 Indian entities reporting FDI or ODI. A significant majority—around 97 per cent—of these entities are unlisted. Furthermore, non-financial companies dominated the landscape, accounting for over 90 per cent of FDI equity at face value.
Top Sources of Inward FDI
The United States continues to be the primary driver of foreign capital entering India. The top contributors include:
- United States: 16.5 per cent
- Mauritius: 14.5 per cent
- Singapore: 13.7 per cent
- United Kingdom: 10.8 per cent
Top Destinations for Indian ODI
When Indian companies look abroad, they are primarily targeting a few key hubs. Singapore, the United Arab Emirates, and the United States together account for more than half of India's total overseas direct investment.
Sectoral Dominance and Valuation
In terms of where foreign money is being parked within India, the manufacturing sector leads the way. At market value, manufacturing accounts for 50.1 per cent of outstanding FDI equity, while the services sector follows closely with a 45 per cent share.
The RBI noted an important technical distinction regarding these figures: the changes in outstanding foreign assets and liabilities may differ from the flows recorded in the balance of payments. This is because the census figures also incorporate valuation changes resulting from shifts in exchange rates and market prices.