In the first quarter of FY26, India’s gross foreign direct investment (FDI) amounted to $25.2 billion, marking an increase from $22.8 billion in the same period of FY25, which translates to a strong growth rate of 10.5 percent year-on-year. If this growth trend continues, annual gross FDI inflows could reach approximately $100 billion, as noted in the Finance Ministry’s monthly review. There have been significant improvements in equity inflows, while repatriation levels have remained consistent with those of Q1 FY25. Consequently, net FDI inflows totaled $4.9 billion in Q1 FY26. Additionally, the report highlights that gross FDI achieved a four-year peak in June 2025.
During Q1 FY26, India’s current account deficit was recorded at $2.4 billion, which is 0.2 percent of GDP, a decrease from $8.6 billion or 0.9 percent of GDP in Q1 FY25. This reduction is attributed primarily to increased net invisible receipts, especially remittances. Net services receipts rose to $47.9 billion in Q1 FY26, up from $39.7 billion in Q1 FY25, indicating a year-on-year growth of 20.7 percent. Remittances for Q1 FY26 totaled $33.2 billion, reflecting a 16.1 percent year-on-year increase, accounting for 13 percent of total current account receipts and playing a vital role in bolstering household consumption and ensuring macroeconomic stability.