 (8).png)
6 days ago
3
ARTICLE AD BOX
Summary
India’s net FDI looks set to record another dismal year. Big Tech’s AI data centre plans aren’t enough. Our economy needs a broad revival of capital inflows. Push for full-scope economic relations with the US.
Is India headed for a second year of negligible net foreign direct investment (FDI)?
In 2024-25, net FDI crashed to nearly $350 million from over $10 billion in 2023-24.
In the first three quarters of 2025-26, it’s under $4 billion.
It was on an uptrend till July and then slid in August, leading to four months on a roll of less money coming in than going out.
Pin this on an uptick in repatriation by foreign investors and outward investments by Indian return-seekers.
Net foreign portfolio flows showed greater volatility, dropping over the summer months and peaking in October before ending 2025 on a weak note.
Recent AI data centre plans declared by US Big Tech reveal one facet of India as a capital magnet, but what we dearly need is a wide-spectrum revival in inflows.
It’s what lets us run a large trade deficit with relative rupee stability.
If we attempt to reduce our surplus with the US by buying more from America, we’d also need billions of more dollars invested in India by US investors across fields.
Notably, America’s trade deficit didn’t budge in 2025 while demand for its “safe assets” wobbled.
The US clearly has adversaries, but what it needs are full-scope economic partners.
English (US) ·