Congress and media ecosystem mislead about drop in ‘net FDI’ to paint doomsday picture of Indian economy under Modi govt: Here is the reality
On Friday (23rd May), Congress party and the media ecosystem in India were up-in-arms about a ‘drastic’ drop in net Foreign Direct Investment (FDI) in India.
In a tweet, the Kerala unit of Congress claimed, “A grim picture both of reducing foreign investor confidence in India and reducing Indian investors on India as well. Everyone gave up on us. 11 years of divisive politics and stupid policy making.”
Screengrab of the tweet by Congress Kerala handle
Seema Chisti, who works for the leftist propaganda outlet ‘The Wire’ alleged, “India’s Net Foreign Direct Investment or FDI Plummets by 96.5% to Reach Record Low.”
Jawhar Sircar, the former TMC MP known for peddling fake news, also made doomsday claims about the India’s economy.
“Foreign investors don’t fall for propaganda like Sanghis, Bhakts and Godi Media. They study the economic and political health of a country, before investing. Their lack of faith in Modi’s India is clear from the red line — how Net FDI (Foreign Direct Investment) has crashed”, he brazened out.
The story about 96% drop in net FDI was covered extensively in the mainstream media with little to no explanation for common readers about its implications. Some media reports insinuated that India’s economy was spiralling downwards with little to no hopes of progress under the incumbent Modi government.
Screengrab of the news reports about fall in ‘net FDI’
Foreign Direct Investment in India
According to Investopedia, Foreign Direct Investment (or FDI) is the “substantial, long-term investment made by a company or government into a foreign project or firm.” In the Indian context, it refers to foreign investment made in Indian companies.
Since the Financial Year 2014 – 2015, India has witnessed a steady growth in FDI inflow in India. The following chart prepared by OpIndia after collecting data from RBI and PIB reports.
It shows that FDI inflow in Financial Year 2014-2015 was $45.15 billion, which has since grown to $81 billion in Financial Year 2024-2025.
When compared year-on-year basis, India has witnessed a whopping 23.05% increase in Financial Year 2015 and 2016. In Financial Year 2024-2025, the growth in FDI inflow was 13.60%.
Financial Year
| Gross FDI inflow (in USD)
| % change as compared to previous year
|
| 2014 – 2015 | $45.15 billion | – |
| 2015 – 2016 | $55.56 billion | 23.05% |
| 2016 – 2017 | $60.22 billion | 8.38% |
| 2017 – 2018 | $60.97 billion | 1.24% |
| 2018 – 2019 | $62 billion | 1.68% |
| 2019 – 2020 | $74.39 billion | 19.98% |
| 2020 – 2021 | $81.97 billion | 10.18% |
| 2021 – 2022 | $83.57 billion | 1.95% |
| 2022 – 2023 | $71.4 billion | -14.56% |
| 2023 – 2024 | $71.3 billion | -0.14% |
| 2024 – 2025 | $81 billion | 13.60% |
(Source: Data published by Press Information Bureau and the Reserve Bank of India – here, here and here)
The only abberation was observed in the Financial Years 2022- 2023 and 2023 – 2024. Although the gross FDI inflow was significant, the net increase was negative.
The fact that Foreign Direct Investment in India is substantial and is increasing year-on-year shows that the Indian economy is in good hands.
“In a phased manner, almost all sectors have been opened up to 100% foreign direct investment (FDI). Almost 90% of the FDI is now under the automatic route…In the recent years, we have introduced a series of liberalisation measures
to further open up the economy, particularly in key sectors such as Defence, Insurance, Petroleum & Natural Gas, Telecom, and Space,” says RBI.
The controversy surrounding ‘Net FDI’
Net Foreign Direct Investment is the difference between Gross FDI inflows and the outward direct investments made by Indian companies, disinvestments and repatriation by foreign entities.
The Reserve Bank of India has released its bulletin for the month of May 2025. It has pointed out that the net FDI for the Financial Year 2024 – 2025 stood at $0.4 billion. The net FDI for the previous Financial Year 2023 -2024 stood at $10.1 billion.
Some media publications have pointed out this difference between $0.4 billion and $10.1 billion to suggest 96.5% drop in net FDI (thereby insinuating some form of economic catastrophe).
Screengrab of the May 2025 bulletin released by RBI
As can be seen from the above graph, Gross FDI inflows for Financial Year 2024 – 2025 stood at $81 billion, which is up 13.6% from $71.3 billion in Financial Year 2023 – 2024.
It can be seen that outward FDI and disinvestments have increased during the same time period, which is a healthy sign for both the economic strength of Indian companies (making strategic investments and acquisitions abroad) and providing easy exit opportunities for foreign companies who invested in India.
In its bulletin, RBI explains, “Net FDI inflows, however, moderated during this period due to higher repatriations and outward investment, which is a sign of a mature market where foreign investors can enter and exit smoothly, reflecting positively on the Indian economy.”
Conclusion
The signifcant gross FDI inflow is a sign of investor confidence, which is coupled with the fact that India’s foreign reserves stand at a whopping $686.1 billion (enough to cover more than 11 months of import).
The Congress party, its friendly journalists and the associated media ecosystem conveniently ignored year-on-year-growth of FDI inflows in India and raked up the issue of net FDI in an isolated manner to paint a doomsday image of the Indian economy.
Despite their both subtle and brazen propaganda, the truth remains that Indian economy is stronger than ever. The country is on its way to become the 4th largest economy in the world.
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