U.S., Singapore accounted for one-third of FDI during FY25: RBI Census

IN NEWS – U.S., Singapore accounted for one-third of FDI during FY25: RBI Census

Analysis

• The Reserve Bank of India (RBI) released the provisional results of its 2024-25 Census on Foreign Liabilities and Assets (FLA), providing key insights into India’s foreign investment landscape.
• Out of 45,702 entities that responded to the census, 41,517 reported Foreign Direct Investment (FDI) and/or Overseas Direct Investment (ODI) in their March 2025 balance sheets.
• Of these, 33,637 entities were part of the previous census, while 7,880 were newly reporting entities, indicating steady expansion in India’s investment network.
• Over three-fourths of the companies reporting inward FDI were subsidiaries of foreign firms, where a single foreign investor held more than 50% of total equity.
• The United States and Singapore together contributed over one-third (34.3%) of India’s total FDI, underscoring their growing role as India’s primary investment partners.

Country-wise FDI Distribution (FY25)

• U.S. – 20%
• Singapore – 14.3%
• Mauritius – 13.3%
• United Kingdom – 11.2%
• Netherlands – 9%
• Total FDI (FY25) – ₹68,75,931 crore (up from ₹61,88,243 crore in FY24).

Outward Direct Investment (ODI)

• Total ODI (FY25): ₹11,66,790 crore.
• Top destinations:
  • Singapore – 22.2%
  • U.S. – 15.4%
  • U.K. – 12.8%
  • Netherlands – 9.6%.

Sectoral Distribution

• Manufacturing sector accounted for the highest shareof total FDI equity capital —
  • 48.4% (market value)
  • 37.8% (face value).
• Services sector held the second-largest share of FDI equity capital at market value.
• Non-financial companies accounted for 90.5% of total FDI equity (face value), highlighting the real-sector orientation of foreign investment.

Structural Observations

• More than 97% of the responding DI entities were unlisted in March 2025, yet they accounted for the bulk of FDI equity capital, revealing the dominance of unlisted subsidiaries in India’s investment structure.
• Growth in ODI (17.9%) outpaced FDI growth (11.1%), indicating rising outward investments by Indian firms.
• Consequently, the ratio of inward to outward DI stood at 5.9 times in March 2025, compared to 6.3 times a year earlier — reflecting gradual balancing between incoming and outgoing capital flows.

Static Part (Conceptual Background)

Foreign Direct Investment (FDI):

• Long-term investment by a foreign entity in an Indian enterprise, aimed at significant management control (≥10% equity stake).
• Can be through automatic or government approval routes, depending on the sector.

Overseas Direct Investment (ODI):

• Refers to Indian entities investing abroad, either by setting up subsidiaries/joint ventures or acquiring stakes in foreign companies.

RBI’s FLA Census:

• Conducted annually under the Foreign Exchange Management Act (FEMA), 1999.
• Collects data on foreign assets and liabilities of Indian companies with FDI/ODI exposure.
• Aims to measure cross-border investment dynamics, corporate ownership structures, and capital flows.

Updated – 29 Oct 2025 ; 10:30 PM | The Hindu

Source:The Hindu