India Inc's Foreign Equity Investments Fall 22% in July: RBI

Equity investments by Indian companies in overseas ventures fell sharply in July 2025. According to data released by the Reserve Bank of India (RBI), firms invested $1.592 billion in foreign entities, down 22% from $2.047 billion in the same month a year earlier.

The July figure also reflected a fall compared to June 2025, when equity investments abroad stood at $2.098 billion. This indicates a slowdown in outbound equity flows, both on a yearly and sequential basis.

Compliance and Regulatory Scrutiny

The decline comes as the RBI has tightened monitoring of outward foreign direct investment. Banks were instructed to remind corporate clients that any unresolved past lapses must be rectified by August 2025. Failure to do so would result in stricter checks and more conditions on new overseas commitments.

Total Financial Commitments Rise Year-on-Year

While direct equity outflows fell, the total financial commitment (TFC), which includes loans, guarantees, and equity, recorded an increase over the same period last year. TFC stood at $3.512 billion in July 2025, compared with $3.319 billion in July 2024. The rise was mainly on account of a higher volume of guarantees issued by Indian companies.

Read more: ₹5 Trillion Dividend Payout: India Inc Sees 11% Rise in FY25!

Month-on-Month Decline in Commitments

Indian companies' total financial commitment for overseas projects was $3.512 billion, an increase from the $3.319 billion recorded the previous year. However, this amount was less than the $5.138 billion committed in June of this year. 

Indian companies issued $1.614 billion in guarantees in July, a significant increase from the $987 million issued during the same month last year.

Conclusion

The RBI data shows that while equity investment abroad by India Inc dipped in July, total commitments rose marginally year-on-year due to higher guarantees. On a month-to-month comparison, both equity flows and total commitments declined, reflecting caution among companies amid tighter regulatory requirements.

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