The growth was led by financial, insurance and business services sectors, followed by manufacturing and wholesale & retail trade, restaurants and hotels.
| Photo Credit:
Prakash Bharti
.
Actual outflows under Overseas Direct Investment (ODI) in April more than tripled, according to data from the Finance Ministry. Experts attribute this sharp rise to diversification and expansion of global presence by Indian companies.
Actual outflow under ODI in the first month of 2025-26 reached over $3.4 billion against over $0.95 billion in April last year, depicting a growth of over 256 per cent. However, the April number is lower than March and February of 2024-25. In entire FY25, actual outflow jumped to over $25.6 billion, a growth of around 80 per cent.
In April, the growth was led by financial, insurance and business services sectors, followed by manufacturing and wholesale & retail trade, restaurants and hotels. Among the recipient countries, Singapore led the race followed by Mauritius and the US.
Experts list a number of reasons for the rise. According to Vaibhav Luthra, Tax Partner, EY India, a strong domestic economy, healthy corporate balance sheet and shifting global trade dynamics have continued to encourage Indian companies to expand and diversify internationally. “For April, high value investments in renewable and insurance space drove this surge, with such transactions possibly aimed at meeting strategic acquisitions/ requirements abroad,” he said.
Decoding the data, Mayank Arora, Director (Regulatory), Nangia Andersen India, said that a majority of the overseas investment spike has been in holding companies based out of Mauritius, Singapore and other typical intermediate jurisdictions for onwards investments in other countries. These investment vehicles are typically used to pool funds before sending them across in operating companies that are engaged in activities such as manufacturing or traditional services such as retail trade, restaurants, etc.
“The move by Indian businesses overseas, mainly focused on setting up SPVs, manufacturing units and retail-based services like restaurants and stores, may be attributed to a number of factors, one of which is the success of inbound foreign investment over the past two decades. FDI in Indian companies by strategic, venture capital and private equity investors has developed large corporations which are now mature enough to venture overseas to follow green shoots across the world,” he said.
While they expect trend in actual outflow to continue, experts also pitch for more policy initiatives. “The rise has been consistent with RBI analyses of FY2025 and the above factors are expected to play similar role in coming months as well, in consistent with wave for overseas expansion,” Luthra said. Arora opined that from a policy maker’s perspective, as long as the US dollar is in check – pertinent to note that the Indian rupee has recovered from historic lows during the corresponding period – the RBI should remain ambivalent to increased overseas investment.
In fact, “some of the recent policy interventions, like notification of new Overseas Investment Rules and setting up of the GIFT City has, in fact, encouraged Indian companies to invest overseas,” he said.
Published on June 3, 2025
The growth was led by financial, insurance and business services sectors, followed by manufacturing and wholesale & retail trade, restaurants and hotels.
| Photo Credit:
Prakash Bharti
.
Actual outflows under Overseas Direct Investment (ODI) in April more than tripled, according to data from the Finance Ministry. Experts attribute this sharp rise to diversification and expansion of global presence by Indian companies.
Actual outflow under ODI in the first month of 2025-26 reached over $3.4 billion against over $0.95 billion in April last year, depicting a growth of over 256 per cent. However, the April number is lower than March and February of 2024-25. In entire FY25, actual outflow jumped to over $25.6 billion, a growth of around 80 per cent.
In April, the growth was led by financial, insurance and business services sectors, followed by manufacturing and wholesale & retail trade, restaurants and hotels. Among the recipient countries, Singapore led the race followed by Mauritius and the US.
Experts list a number of reasons for the rise. According to Vaibhav Luthra, Tax Partner, EY India, a strong domestic economy, healthy corporate balance sheet and shifting global trade dynamics have continued to encourage Indian companies to expand and diversify internationally. “For April, high value investments in renewable and insurance space drove this surge, with such transactions possibly aimed at meeting strategic acquisitions/ requirements abroad,” he said.
Decoding the data, Mayank Arora, Director (Regulatory), Nangia Andersen India, said that a majority of the overseas investment spike has been in holding companies based out of Mauritius, Singapore and other typical intermediate jurisdictions for onwards investments in other countries. These investment vehicles are typically used to pool funds before sending them across in operating companies that are engaged in activities such as manufacturing or traditional services such as retail trade, restaurants, etc.
“The move by Indian businesses overseas, mainly focused on setting up SPVs, manufacturing units and retail-based services like restaurants and stores, may be attributed to a number of factors, one of which is the success of inbound foreign investment over the past two decades. FDI in Indian companies by strategic, venture capital and private equity investors has developed large corporations which are now mature enough to venture overseas to follow green shoots across the world,” he said.
While they expect trend in actual outflow to continue, experts also pitch for more policy initiatives. “The rise has been consistent with RBI analyses of FY2025 and the above factors are expected to play similar role in coming months as well, in consistent with wave for overseas expansion,” Luthra said. Arora opined that from a policy maker’s perspective, as long as the US dollar is in check – pertinent to note that the Indian rupee has recovered from historic lows during the corresponding period – the RBI should remain ambivalent to increased overseas investment.
In fact, “some of the recent policy interventions, like notification of new Overseas Investment Rules and setting up of the GIFT City has, in fact, encouraged Indian companies to invest overseas,” he said.
Published on June 3, 2025
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The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making
The point of using Lorem Ipsum is that it has a more-or-less normal distribution of letters, as opposed to using ‘Content here, content here’, making it look like readable English. Many desktop publishing packages and web page editors now use Lorem Ipsum as their default model text, and a search for ‘lorem ipsum’ will uncover many web sites still in their infancy.
It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout. The point of using Lorem Ipsum is that it has a more-or-less normal distribution
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