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
Foreign direct investment is usually tracked in two layers: gross inflows, which show fresh money entering India, and net foreign direct investment, which adjusts for outward investment and exits. A fall in gross inflows, combined with higher outflows, can push net FDI into negative territory even when India continues to attract foreign capital.
What changed now
Gross inflows fell to about $6.07 billion in May 2026, below April 2026 and also lower than a year earlier. For April-May 2026, the main equity inflow source countries were Japan, Singapore and Mauritius, while financial services, manufacturing, retail/wholesale trade and computer services attracted the largest shares of investment.
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