Net FDI Jumps to 45-Month High in February 2026, Breaking Six-Month Negative Streak
India's net Foreign Direct Investment (FDI) jumped to a 45-month high in February 2026, breaking a six-month negative streak. Gross FDI grew 61.6% year-on-year to a seven-month high of nearly $9 billion. The recovery reflects improving investor sentiment despite global geopolitical headwinds from the West Asia conflict. The RBI's Bulletin also highlighted that India's financial system and external sector remain resilient, with key external vulnerability indicators remaining contained and forex reserves staying comfortable. Separately, India's credit flows jumped 38% in FY26 as RBI's rate cuts and liquidity measures boosted lending demand.
Key Facts & Details
7 points- 1Net FDI hits 45-month high in February 2026; gross FDI up 61.6% to ~$9 billion
- 2Breaks six-month consecutive negative FDI streak
- 3Credit flows surge 38% in FY26 as RBI easing boosts lending demand
Deep Dive
- +Outstanding financial resources for the commercial sector crossed ₹300 lakh crore for the first time
- +Credit expansion reached ₹44.6 lakh crore in FY26
- +India's forex reserves rose to $703.30 billion as of April 17
- +RBI has cut the repo rate to 5.25% and infused liquidity through various open market operations
Exam Focus
Likely MCQ: India's net FDI in February 2026 reached its highest in how many months? → Answer: 45 months (highest since September 2022)
Related Topics
Exam Relevance & Angle
Core Banking/Economy: FDI trends, RBI policy impact on credit, and India's external sector resilience.
Target Exams
Background & Context
Foreign Direct Investment (FDI) represents long-term capital inflows where foreign entities invest in Indian businesses by acquiring ownership stakes. Unlike FPI (Foreign Portfolio Investment), which is short-term and market-linked, FDI reflects sustained investor confidence in the economy.
Net FDI = Gross FDI inflows minus outflows (Indian companies investing abroad + repatriation). A negative net FDI means outflows exceeded inflows — which had been the case for six consecutive months before February 2026.
Key sectors attracting FDI in India include services, manufacturing, computer software, telecommunications, trading, automobile, and infrastructure. The top source countries for FDI are Mauritius, Singapore, USA, Netherlands, Japan, UK, and UAE. The DPIIT (Department for Promotion of Industry and Internal Trade) tracks and promotes FDI.
India aims to attract $100 billion in annual FDI as part of its goal to become a $5 trillion economy.
Related GK Concepts
Must KnowTest Yourself
1 / 3Which department in India is responsible for promoting and tracking FDI?
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