India's Q1 FY27 foreign direct investment reaches 15-year high despite large outflows

India recorded $30.66 billion in gross foreign direct investment in Q1 FY27, surpassing the previous record from Q2 2020-21. However, foreign investors repatriated roughly 44 % of that sum, while Indian companies exported about 31 % of the foreign exchange through overseas acquisitions. After these outflows, net FDI stood at $7.84 billion, a five-year peak and a 50 % increase over the same quarter a year earlier.

The share of net inflows has fallen to about 25 % of gross flows, reflecting a shift toward short-term capital movements. Experts such as Sanjay Malhotra of the RBI view the higher repatriation as a sign of market maturity, whereas critics like Biswajit Dhar and Pronab Sen warn that rising outward investment may signal weaker domestic demand and could deter long-term investors. Major equity inflows were led by Japan, with MUFG Bank acquiring a 20 % stake in Shriram Finance and other Japanese banks taking sizable positions in Indian financial firms.