MC EXCLUSIVE Govt sets up panel to analyse net FDI inflows amid subdued numbers

While India attracted about $35.2 billion in gross FDI in the first half of FY26, net inflows stood at a lower $7.6 billion

• Government forms panel to study trends in India's net FDI inflows
• Net FDI moderation mainly due to rising outward investment by Indian firms
• Panel's findings expected within a month; pharma sector eyed for growth

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The central government has set up an inter-departmental committee to examine trends behind India’s net foreign direct investment (FDI) inflows, amid subdued numbers, Economic Affairs Secretary Anuradha Thakur said on February 3.

The panel, comprising officers from the Department of Economic Affairs (DEA) and the Department for Promotion of Industry and Internal Trade (DPIIT), has also commissioned a detailed statistical analysis from external specialist bodies.

The findings of this panel are expected within the next month, Thakur told Moneycontrol in an interview, adding that preliminary analysis suggests that the moderation in net FDI is largely due to a sharp rise in outward direct investment (ODI) by Indian companies.

“What we can see so far from the data is that it is mostly on account of ODI, which is a relatively new phenomenon in India, that net FDI numbers are impacted. FDI inflows per se have been quite robust,” Thakur said.

While India attracted about $35.2 billion in gross FDI in the first half of FY26, net inflows stood at a lower $7.6 billion, largely due to rising outward investment by Indian firms, which amounted to around $16.3 billion over the same period.

She added that ODI reflects the fact that our rules and regulations now permit Indian companies to expand globally. “That is not something we can quarrel with”.

Thakur, however, acknowledged that there is scope to draw in more FDI.

“Would we like FDI to be higher? Most certainly,” she said, adding that the government is working to identify specific sectors where growth can be proactively pushed through targeted grant-based schemes.

She pointed to pharmaceuticals as a sector where both domestic investment and foreign inflows could pick up, possibly as early as the next financial year.