India's outward foreign direct investment declined 37% year-on-year to $4.34 billion in September, down from $6.87 billion recorded in August, according to provisional Reserve Bank of India data published Monday. The metric also experienced a 77% month-on-month decrease from the $2.29 billion reported in August. As reported by The Economic Times, the RBI noted that the data remains provisional and subject to revision based on final reporting by banks. The latest figures come at a time when India's net foreign direct investment inflows have strengthened, supported partly by a moderation in outward investment.
Equity commitments outside India decreased 20% to $3.27 billion in September from $4.11 billion in August, though they remained higher than the $2.59 billion reported a year ago. Loans extended to overseas subsidiaries increased to $549.16 million in September from $473.52 million in August, registering a rise of nearly 16%. According to The Economic Times, outward FDI commitments comprise equity, loans and guarantees, with the amount of outward guarantees issued falling sharply to $528.21 million month-on-month from $2.29 billion reported in August. The decline in overall overseas investment commitments was therefore largely driven by lower guarantees, rather than a uniform fall across all investment categories.
Equity outflows were led by Sun Pharma Laboratories with a $1.99 billion investment, followed by $146 million investment by White Oak Investment Management and Knack Global Pvt Ltd's $48 million outflow. On the loan side, construction company Highway Constructions transferred $80 million to its UK subsidiary, representing the highest loan transfer during the month. As reported by The Economic Times, Paharpur Cooling Towers also issued a $103 million guarantee to its Singapore subsidiary in September. The data shows that despite monthly volatility, equity commitments remained 26% higher year-on-year, indicating stronger underlying investment trends despite the September decline.
