Net FDI turns negative in August as outflows, FPI selling rise
Gross foreign direct investment (FDI) into India fell to $6.0 billion in August after surging to over a four-year high of $11.11 billion in July. This, along with a 30% month-on-month rise in repatriation by foreign companies to $4.9 billion, led to the net FDI number for August turning negative for the first time in the current fiscal year.Net FDI was $616 million in outflows in August compared with $5 billion inflows in July, according to data from the Reserve bank of India's latest monthly bulletin.Singapore, the US, Mauritius, the UAE and the Netherlands were the top sources of FDI in April-July 2025, accounting for 76% of total inflows, the RBI said. More than 74% of the FDI equity inflows were in sectors like manufacturing, computer services, business services, communication services and electricity generation and distribution.
FINANCE $ SALES & REERThe RBI stepped up its intervention in the forex market, likely to contain volatility and a steep fall in the Indian rupee against the dollar. The central bank net sold $7.7 billion in August, higher than the July net sales of $2.5 billion, the latest bulletin showed Monday. The rupee had breached the crucial mark of 88 to a dollar for the first time in late August amid US tariffs uncertainties.The real effective exchange rate (REER) - the weighted average of India' s currency in relation to a basket of six major currencies - was 95.84 in September. This means the rupee was undervalued by 4.16% relative to its intrinsic value.FINANCE REMITTANCESOutward remittances under the Liberalised Remittance Scheme (LRS) rose for the second time in a row in August. It stood at $2.6 billion, up 7.7% over July.Expenditure related to travel, the largest component of LRS, increased to $1.6 billion in August from $1.4 billion a month earlier. Expenditure on overseas education increased 39% month-on-month to $319 million in August. Components like purchase of properties, investments in equity & debt, and gifts declined over the previous month. The RBI's LRS allows resident individuals to remit funds abroad for specific current and capital account transactions, subject to an annual limit of $250,000 per individual.NRI DEPOSITSOutstanding NRI deposits stood at $167.9 billion in July compared with $168.3 billion in the previous month. Of these, FCNR(B) deposits remained flat at $33.6 billion in July, while non-resident (external) rupee account or NRE deposits fell to $102 billion from $102.8 billion in June. Flows from NRI deposits in the first four month of the financial year stood at $4.7 billion compared with $5.8 billion in the same period year earlier.
FINANCE $ SALES & REERThe RBI stepped up its intervention in the forex market, likely to contain volatility and a steep fall in the Indian rupee against the dollar. The central bank net sold $7.7 billion in August, higher than the July net sales of $2.5 billion, the latest bulletin showed Monday. The rupee had breached the crucial mark of 88 to a dollar for the first time in late August amid US tariffs uncertainties.The real effective exchange rate (REER) - the weighted average of India' s currency in relation to a basket of six major currencies - was 95.84 in September. This means the rupee was undervalued by 4.16% relative to its intrinsic value.FINANCE REMITTANCESOutward remittances under the Liberalised Remittance Scheme (LRS) rose for the second time in a row in August. It stood at $2.6 billion, up 7.7% over July.Expenditure related to travel, the largest component of LRS, increased to $1.6 billion in August from $1.4 billion a month earlier. Expenditure on overseas education increased 39% month-on-month to $319 million in August. Components like purchase of properties, investments in equity & debt, and gifts declined over the previous month. The RBI's LRS allows resident individuals to remit funds abroad for specific current and capital account transactions, subject to an annual limit of $250,000 per individual.NRI DEPOSITSOutstanding NRI deposits stood at $167.9 billion in July compared with $168.3 billion in the previous month. Of these, FCNR(B) deposits remained flat at $33.6 billion in July, while non-resident (external) rupee account or NRE deposits fell to $102 billion from $102.8 billion in June. Flows from NRI deposits in the first four month of the financial year stood at $4.7 billion compared with $5.8 billion in the same period year earlier. 
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