India saw gross Foreign Direct Investment (FDI) inflows rise to a new record high of $94.53 billion in 2025-26, up 17% from the previous year, although the net figure was a mere $7.65 billion, data released on Friday by the Reserve Bank of India (RBI) showed.

At $94.53 billion, the gross FDI inflows last year comfortably exceeded the previous record of $84.84 billion posted in 2021-22. And while the net FDI inflow in 2025-26 was higher than the $959 million received in 2024-25, it remains below previous years.

Net FDI is calculated after adjusting gross FDI for investments that are repatriated by foreign companies and overseas investments made by Indian companies. Despite record gross FDI inflows, the net figure has been low in the past two years due to foreign investors taking back money they had previously invested in India. This repatriation can be in the form of profits, dividend, or sale of assets. Meanwhile, Indian companies have also invested more abroad.

In 2025-26, foreigners’ repatriations stood at $53.58 billion, up from $51.49 billion in 2024-25 and $44.47 billion in 2023-24. Meanwhile, overseas FDI by Indian companies rose to $33.29 billion last year. In 2024-25 and 2023-24, it was $28.17 billion and $16.68 billion, respectively.

The weak net FDI inflows have contributed to the ongoing pressure on the rupee’s exchange rate, which came close to breaching the 97-per-dollar earlier this week. It ended at 95.69 per dollar on Friday, appreciating sharply thanks to the RBI’s interventions in the forex market. The rupee is down 5% since the war in West Asia started.

Data released on Friday showed the extent of the central bank’s intervention in March was almost $30 billion on a gross basis, the most since it sold $46.65 billion in February 2025. In 2025-26 as a whole, the RBI sold $195.38 billion of foreign currency on a gross basis, less than half the $398.71 billion it had sold in 2024-25. However, in net terms, the RBI’s forex sales in the last fiscal were to the tune of $53.13 billion as against $34.51 billion in 2024-25. In addition, the central bank also intervened far more heavily in the forward market last year.

The RBI’s gross forex sales of $29.6 billion in March was the highest in 13 months and occurred even as net FDI during the month was in positive territory for the second month running. After net FDI inflows in February had surged to a near four-year high of $4.44 billion – revised down from $4.62 initially – following six consecutive months of net FDI outflows, March saw the net figure declining to $1.57 billion, dragged down by a 31% month-on-month fall in gross FDI inflows to $6.23 billion. Compared to the final month of 2024-25, gross FDI inflows in March were up 6%.

Inflows had risen sharply in February on the back of global investor sentiment reversing in the wake of the signing of an interim trade deal between India and the US early that month, which eliminated the penal 25% tariff and reduced the reciprocal tariff to 18% from 25%. Foreign Portfolio Investors (FPIs) had also net bought Indian financial assets in February to the tune of $4.17 billion. However, once the West Asia war began at the end of February, foreign capital has exited Indian shores in droves: $13.6 billion in March, $7.56 billion in April, and $2.62 billion so far in May.