Gross FDI vs. Net FDI
Understanding the Divergence
Gross FDI (as tracked by DPIIT) counts all equity inflows into India, including reinvested earnings and inter-company loans, before any deductions. Net FDI (as tracked by RBI in the Balance of Payments) = Gross FDI inflows minus (repatriation/disinvestment + outward FDI by Indian companies). A large gross-to-net gap signals that foreign companies are repatriating significant profits or returning capital, and/or that Indian companies are rapidly expanding overseas.
- Outward FDI by Indian companies surged to over $35 billion in FY26, driven by acquisitions and overseas expansions by Indian multinationals.
- Profit repatriation by foreign subsidiaries has been rising as established businesses in India mature and dividend policies normalize.
- Net FDI is more relevant for assessing its impact on the current account deficit (CAD) and external sector stability. A thin net FDI means the current account requires more financing from portfolio flows (FPI), which are more volatile.
- The divergence is not unique to India — it is a global feature of maturing FDI relationships — but the magnitude in FY26 is notable.
● Tracked since April 24, 2026 · last seen May 22, 2026 · updates as the daily brief publishes
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