India Will Continue to Attract Overseas Investments Due to Strong Growth: RBI Governor

The Indian economy is expected to continue attracting foreign investments, supported by robust domestic growth and improving economic fundamentals, Reserve Bank of India Governor Sanjay Malhotra said in an interview with NDTV Profit. 

He stated, “Inflows may not be linear year-on-year, but overall, India should continue attracting quality investments across banking, technology and the broader economy.”

Large Financial Sector Deals Drive Inflows

India has recently witnessed several high-value transactions in the financial services sector, resulting in substantial overseas capital inflows. Key deals include Emirates NBD’s $3 billion acquisition of a majority stake in RBL Bank, Blackstone’s $705 million purchase of a 9.9% stake in Federal Bank, and Abu Dhabi-based IHC’s $1 billion acquisition of a 43.46% stake in Samman Capital. 

According to Malhotra, these investments are not driven by short-term factors but reflect cumulative reforms and efforts undertaken over several years to strengthen banks and non-bank financial companies.

Long-Term Capital, Not Short-Term Flows

Malhotra emphasised that both foreign and domestic investors are attracted by the resilience of India’s financial sector and the country’s long-term growth prospects. Importantly, he highlighted that these inflows represent long-term, patient capital rather than speculative or volatile money. 

He also clarified that the RBI has not altered any regulatory norms to attract such investments, with eligibility criteria remaining unchanged. In 2025 alone, around $15 billion of committed or actual investments flowed into private financial entities, underlining growing confidence in the Indian financial system.

Growth Outlook and Inflation Trends

India’s growth momentum remains strong, with the economy recording 8% growth in the first half of the year and projected to grow 7.4% in the current financial year, followed by around 7% next year. 

For FY26, the Monetary Policy Committee raised its GDP growth forecast to 7.3% while lowering the retail inflation projection to 2%. Inflation, Malhotra said, is currently low due to food price base effects and softer global commodity prices, but is expected to move towards a comfortable 3–4% range as base effects fade.

Also Read: RBI Cancels Registration of 35 NBFCs!

Conclusion

Overall, India’s strong growth outlook, stable inflation environment and resilient financial sector continue to reinforce its attractiveness as a destination for foreign investment. With capital demand remaining strong and reforms bearing fruit, India appears well positioned to sustain long-term inflows of quality global capital.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a private recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.