Strong Foreign Investment Momentum Could Push FDI To Record Levels
India could witness gross foreign direct investment (FDI) inflows exceeding $100 billion in the ongoing financial year 2026-27 (FY27), according to Reserve Bank of India (RBI) Deputy Governor Poonam Gupta, who highlighted the country’s strong investment momentum despite global economic uncertainties.
Speaking during the post-monetary policy press conference on Friday, Gupta said India’s investment environment remains healthy and continues to attract significant foreign capital. Gross FDI inflows stood at $95 billion in FY26, and the current trend suggests that inflows could surpass the $100 billion milestone this year.
“Private capital formation numbers actually have been very healthy. Investment to GDP ratio has been turning upwards. So those numbers remain healthy. If we look at the BoP side, gross FDI flows were $95 billion in 2025-26 and can be much more this year. Certainly, it can top $100 billion and can go up to $110 billion, $120 billion, if not more,” Gupta said.
She added that the growth in FDI inflows is not a one-off phenomenon but part of a broader long-term trend that reflects sustained investor confidence in India’s economic prospects.
Gross FDI Continues To Rise Despite Global Challenges
India has experienced a notable recovery in foreign investment inflows over the past two years after a period of moderation driven by global economic headwinds.
Gross FDI inflows increased 17% year-on-year to reach $95 billion in FY26, reflecting renewed confidence among international investors. The rebound comes after inflows had declined from $83.57 billion in FY22 to $71.36 billion in FY23 amid rising interest rates, geopolitical tensions, and slowing global growth.
FDI inflows remained largely stable at $71.28 billion in FY24 before recovering to $80.6 billion in FY25 and reaching a record $95 billion in FY26.
Economists attribute the improvement to India’s strong domestic consumption, expanding manufacturing sector, infrastructure investments, and policy initiatives aimed at attracting long-term capital.
Why Is Net FDI Still Relatively Weak?
While gross FDI figures have been encouraging, net FDI inflows have remained relatively subdued over the past two years.
This is largely because foreign investors have increased profit repatriation, while Indian companies have accelerated overseas investments through acquisitions and investments in foreign subsidiaries.
Net FDI turned positive in February 2026 after remaining negative for six consecutive months, recording inflows of $4.44 billion. In March, net inflows stood at $1.57 billion compared to an outflow of $502 million during the same month last year.
According to Madan Sabnavis, Chief Economist at Bank of Baroda, the key factor is the growing amount of capital flowing out alongside fresh investments coming in.
“Gross FDI has been very impressive, probably may touch even $100 billion this year. The important part is what happens to the repatriations. Then there’s a third part that Indian companies have increased their investment outside. Therefore, the net number, which is finally important from the balance of payments perspective, remains relatively modest,” he said.
India Remains A Preferred Investment Destination
Economists believe the broader trend remains positive for India. Foreign investors continue to view the country as one of the most attractive long-term growth markets globally, particularly in sectors such as manufacturing, digital services, infrastructure, financial services, and clean energy.
With policy reforms, a large domestic market, and improving ease of doing business, India is expected to continue attracting substantial foreign capital in the coming years.
If current trends persist, FY27 could become the first year in which India records gross FDI inflows exceeding $100 billion, further strengthening its position as a major global investment destination.
