Context
India’s net foreign direct investment turned negative in May 2026 as total FDI outflows exceeded inflows by $74 million. Gross inflows fell sharply to about $6.07 billion, ending a three-month period of positive net FDI.
Explanation
- FDI refers to long-term foreign investment involving ownership or control in an enterprise.
- Gross FDI inflows include fresh equity investment, reinvested earnings and other capital.
- FDI outflows include outward investment by Indian firms, repatriation and disinvestment by foreign companies.
- Net FDI is equal to Gross inflows − Total outflows; it becomes negative when outflows exceed inflows.
- FDI differs from Foreign Portfolio Investment, which mainly involves financial securities without managerial control.
- Major inflow sectors included financial services, manufacturing, trade and computer services.
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