Net FDI negative in May on $74 million excess outflow
India’s net foreign direct investment turned negative in May 2026 because outflows exceeded inflows, while gross inflows also weakened sharply.
- Reserve Bank of India statistics track gross foreign direct investment, net foreign direct investment, and outward investment flows.
- Japan, Singapore and Mauritius supplied most equity inflows, while financial services, manufacturing, retail/wholesale trade and computer services received the bulk of investment.
What happened
India’s net foreign direct investment turned negative in May 2026, because outflows exceeded inflows by $74 million, according to Reserve Bank of India data. The development matters for the external sector because it shows that foreign equity investment was not enough to offset outward Indian investment and foreign-company repatriation or disinvestment.
Background and earlier position
UPSC can frame this topic around the distinction between gross foreign direct investment and net foreign direct investment, the causes of capital outflows, and the implications of negative net foreign direct investment for the balance of payments, investor sentiment, and sectoral investment trends.
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