Indian companies are sending more money to their overseas businesses despite the uncertainty in global trade following the election of Donald Trump as the US President. In February, Indian companies sent $5.35 billion overseas, the highest monthly outflow in at least 38 months, data compiled by Moneycontrol shows.
In the first 11 months of FY25, Indian companies sent $36 billion overseas, over 40 percent more than the $25.2 billion in the previous year and $24.8 billion in FY23, RBI data on overseas direct investment (ODI) shows.
ODI is a special category of overseas remittance designed for companies looking to take money out of India for corporate purposes such as expansion plans and capital infusion.
In a year, a company can send up to $1 billion overseas. The ODI route is different from the Liberalized Remittance Scheme (LRS) through which Indian individuals are allowed to send up to $250,000 overseas every year.
Singapore remained the top source of ODI outflow, with funds flows into that country accounting for 23 percent of total remittances in FY25.
Singapore is generally used as an intermediate jurisdiction by companies who first send money to that country after which the entity there remits it to the ultimate destination. This is done to utilise various tax treaties Singapore has with other countries.
The United States is the second largest source of ODI remittances, contributing 16 percent to the total outflows. The United Kingdom and the United Arab Emirates(UAE) are the third and fourth largest destinations for ODI with a share of 12 percent and 10 percent, respectively. The Netherlands and Mauritius are among other key destinations for ODI flows, data shows.
A granular analysis of ODI transaction data shows that most companies sending money to the US were from the services sector, notably information technology (IT).
In terms of the number of transactions, the US is ahead of Singapore but most of the remittances have been small-ticket — mostly less than $100 million. The UAE and the UK have seen remittances from diverse sectors such as manufacturing, logistics, metals and minerals.
The rise in overseas investments comes on the back of big-ticket transactions by leading Indian companies. For instance, in February, Vedanta sent about $1 billion into a Mauritius-based subsidiary THL Zinc, making it one of the largest transactions of the fiscal.
Sun Pharma’s equity infusion of $829 million into its Netherlands-based subsidiary in December was another big transaction during the year. Biocon Biologics issued guarantees to its UK-based joint venture Biocon Biologics UK Ltd in October, making it one of the largest United Kingdom-bound remittances of the year.
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