India's FDI Equity Inflows Rise 6% to $19.81 Billion in April-June 2026: Japan Becomes the Top Source
Foreign Direct Investment (FDI) equity inflows into India rose 6% to $19.81 billion in April-June 2026 (the first quarter of 2026-27). In the same quarter last year they were $18.62 billion. The data comes from the Department for Promotion of Industry and Internal Trade (DPIIT).
Total FDI, which also counts reinvested earnings (profits that foreign companies keep in India and invest again) and other capital, was $30.65 billion, up about 22%.
Japan was the biggest source at $5.71 billion. It was followed by Singapore ($5.22 billion), Mauritius ($2.31 billion), the Netherlands ($1.38 billion), the US ($1.34 billion) and the UAE ($868 million). Inflows from the US fell about 76%, from $5.61 billion a year ago.
The services sector got the most money ($7.04 billion). Next came computer software and hardware ($2.84 billion), trading ($1.92 billion), non-conventional (renewable) energy ($1.24 billion) and automobiles ($622 million).
Among states, Tamil Nadu received the most ($5.95 billion), followed by Maharashtra ($4.22 billion), Delhi ($2.67 billion), Karnataka ($2.11 billion) and Gujarat ($1.3 billion).
The flow was uneven through the quarter. April brought $12.1 billion, nearly double April 2025. May ($2.8 billion) and June ($4.91 billion) were lower than a year earlier.
Foreign Direct Investment (FDI): Concepts and India's Policy Framework
Foreign Direct Investment is money a foreign company or person puts into an Indian business to own a lasting share in it and have a say in how it is run. A Japanese carmaker building a factory in India, or a foreign bank buying a large stake in an Indian lender, are both FDI. It is different from portfolio money, which only buys shares for returns and can leave quickly. Because FDI brings long-term money, technology and jobs, every country tries to attract it.
Japan moving to the top, ahead of Singapore and Mauritius, is notable because Japanese money usually comes directly from Japanese companies rather than through tax-treaty hubs. The steep fall in US inflows and the big gap between equity FDI and total FDI are both reminders that one quarter's ranking can swing with a few large deals.
Double Taxation Avoidance Agreement (DTAA)
A Double Taxation Avoidance Agreement, or DTAA, is a treaty between two countries that decides which country gets to tax which income. Without it, a person or company earning money in one country while living in another could be taxed twice on the same income. A DTAA removes or reduces this double tax. It also helps the two countries share tax information to catch cheats.
Singapore ($5.22 billion) and Mauritius ($2.31 billion) are still among India's top three sources of FDI this quarter, largely because of their tax treaties with India. As India has tightened these treaties with source-based capital gains tax, GAAR, the PPT and the Tiger Global ruling, the share of money flowing through such hubs is watched closely. Japan topping the list this quarter shows how rankings shift when direct investors, not treaty hubs, lead the flow.
Balance of Payments (BoP)
The Balance of Payments, or BoP, is a record of all money that flows between India and the rest of the world over a period, usually a quarter or a year. It records what India earns from abroad and what it pays abroad. You can think of it as the country's household account book with the outside world. If more foreign currency comes in than goes out, India's foreign exchange reserves rise. If more goes out, the reserves fall.
FDI is part of the capital account of India's BoP, and it is the most stable way to pay for the current account deficit. In April-June 2026, portfolio investors took out $9.6 billion and reserves fell by $8.1 billion, so steady FDI inflows of $19.81 billion in equity (and $30.65 billion in total) were an important support for India's external position during the quarter.
- FDI equity inflows, April-June 2026: $19.81 billion, up 6% from $18.62 billion a year earlier (DPIIT data)
- Total FDI including reinvested earnings and other capital: $30.65 billion, up about 22%
- Top sources: Japan $5.71 billion; Singapore $5.22 billion; Mauritius $2.31 billion; Netherlands $1.38 billion; US $1.34 billion; UAE $868 million
- US inflows fell about 76%, from $5.61 billion
- Top sectors: services $7.04 billion; computer software and hardware $2.84 billion; trading $1.92 billion; non-conventional energy $1.24 billion; auto $622 million
- Top states: Tamil Nadu $5.95 billion; Maharashtra $4.22 billion; Delhi $2.67 billion; Karnataka $2.11 billion; Gujarat $1.3 billion
- Monthly: April $12.1 billion; May $2.8 billion; June $4.91 billion
- 10% of paid-up capital: the line between FDI and FPI in a listed company
- Q1 2026-27 current account deficit: $4.2 billion (0.5% of GDP); net FPI outflow $9.6 billion; reserves fell $8.1 billion