India’s net foreign direct investment remained negative for the third consecutive month in October 2025, with outflows exceeding inflows by $1.5 billion, an analysis of latest data from the Reserve Bank of India shows. Separately, the RBI pointed out that uncertainty around the India-U.S. trade deal was a major reason why foreign portfolio investors were also taking more money out of the country than putting in it.  

The main drivers of the negative net FDI figure are a combination of a year-on-year fall in direct investments entering the country, and an increase in outward direct investments made by Indian companies. Direct investments are typically made in assets and are viewed as growth-generating, as opposed to portfolio investments, which are generally done in equity and debt for expected returns.

Notably, the most recent RBI data shows that outflows have exceeded inflows in terms of both direct as well as portfolio investments.

Direct outflows  

The data shows that gross direct investment into India, which is the total amount of investments entering the country, stood at $6.5 billion in October 2025, down 8.8% over its level in October 2024, and down 6.6% over its level in September 2025.

Outward investments made by Indian companies increased to about $3.1 billion in October 2025, up 63.1% over its level in October 2024. However, this was nearly 24% lower than the outward FDI seen in September 2025.

 “Net FDI was negative in October, mainly due to high repatriation and outward FDI,” the RBI noted in its monthly bulletin. “The key destinations for outward FDI were Singapore, followed by the US and the UAE, together accounting for more than half of total outward FDI.” 

The report further said that around 90% of the outward FDI was in financial, insurance, and business services, followed by wholesale, retail trade and manufacturing.

Repatriation and disinvestment by foreign companies operating in India, the other component of outward direct flows, stood at about $5 billion in October 2025. This was 7.% lower than in October 2024, but 8.3% higher than in September 2025.

As a result, net FDI stood at -$1.5 billion in October, as compared to -$129 million in October last year.

Trade deal uncertainty to blame 

The RBI noted that foreign portfolio investments turned negative in December, up to December 18, which means that investors took out more money than they put in. Net foreign portfolio investments stood at -$2.3 billion in December 2025 up to December 18. 

“FPI flows turned negative in December following inflows in the previous two months,” the RBI noted. “The uncertainty surrounding the India-US trade deal and investors’ caution around high domestic valuations kept net FPI flows to India muted in recent months.” 

The U.S. has imposed 50% tariffs on imports from India, and while both sides say they are making headway in finalising a tariff-related first tranche of a trade deal, so far no announcement of the completion of such a deal has been forthcoming.