India's outward FDI surges to $3.91 bn in March: RBI

India's outward foreign direct investment (FDI) commitments saw a significant increase, reaching $3.91 billion in March 2024, up from $2.63 billion in March 2023, as per data from the Reserve Bank of India (RBI). On month-on-month, FDI commitments were also up as compared to the $3.67 billion recorded in February 2024.

The outbound FDI, which is expressed as a financial commitment, includes three main components: equity, loans, and guarantees. Equity commitments more than doubled to $2.03 billion in March 2024 from $758.22 million in March 2023, surpassing the $616.46 million recorded in February 2024.

Debt commitments nearly doubled to $1.04 billion in March 2024, up from $517.98 million a year earlier, although they were considerably higher than the $254.24 million recorded in February 2024. Meanwhile, guarantees for overseas units decreased to $839.16 million in March 2024 from $1.36 billion in March 2023. Sequentially, it declined substantially compared to the $2.80 billion reported in February 2024, according to RBI data.

The net foreign direct investment (FDI) in India, calculated by subtracting outflows from inflows, fell by 38.4% year-on-year to $15.41 billion in the first ten months of the current fiscal year due to increased capital repatriation.

As per the Reserve Bank of India’s March 2024 bulletin, FDI into India amounted to $25.53 billion, while outflows were $10.11 billion from April 2023 to January 2024. Comparatively, in the same period the previous year, FDI inflows were $36.75 billion, and outflows reached $11.75 billion.

Repatriation and divestment by investors who had direct investments in India surged to $34 billion in the ten months of the fiscal year, up from $24.99 billion in the corresponding period last year, based on RBI data.

The report highlighted that despite global FDI flows remaining lacklustre in 2023, India performed better than its Asian counterparts.

Approximately 80% of the equity flows originated from Singapore, Mauritius, the US, the Netherlands, Japan, and the United Arab Emirates.

FDI inflows into India are anticipated to receive a boost from the trade and economic partnership agreement (TEPA) signed with the European Free Trade Association (EFTA) on March 10. The TEPA aims to attract $100 billion in FDI from EFTA countries to India over the next 15 years and create one million direct job opportunities, the report added.