Current Affairs - Economy - Discussion

In May 2025, India witnessed a staggering 98% year-on-year decline in net Foreign Direct Investment (FDI) inflows, dropping to just $35 million from over $2 billion in May 2024. This significant fall was driven by a sharp increase in repatriation by foreign investors and a drop in gross inflows. Despite the downturn, India’s economic resilience is evident from its strong foreign exchange reserves of $696.7 billion, which provide more than 11 months of import cover and cover 95% of external debt. The situation highlights the volatility of global capital flows and the importance of maintaining macroeconomic stability.