India’s outward FDI was $3.7 billion in October 2024, higher than in the same period a year ago, the RBI said. The figure was, however, still lower than $3.77 billion recorded during September 2024.
Aggregate outward FDI for October 2024 was categorized into equity investments, loans, and guarantees representing the aggregate financial agreements settled by Indian companies overseas. Equity commitments accounted to $655.84 million, which declined sharply from the records of October 2023 that stood at $993.35 million and $817.64 million in the previous month of September 2024.
Meanwhile, investments in debts followed an impressive growth trend. The loan component of outward FDI, according to the Central Bank of Bahrain, remained at $1.24 billion in October 2024 from the same period the previous year. In the same month last year, outward FDI loan components only saw $248.4 million and are higher than what was recorded in September 2024 at $1.16 billion. The increased loan component points to a trend of increasing the use of debt financing for foreign investments. Overseas guarantees, meanwhile, proved to be more stable at $1.33 billion in October 2024, as compared to $1.31 billion for the same month last year. However, it declined from $1.79 billion recorded in September 2024.
According to RBI data, one finds a change in the outward investment strategy of India. The latter’s commitments to equity declined while debt financing kept going up. Although the monthly upward trend was not kept between September and October, one observes yearly growth in outward FDI: from $2.55 billion in October 2023 to $3.24 billion in October 2024, which shows an ongoing interest in increasing the global reach of Indian business.
It also demonstrates that the Indian investment strategy is becoming strategically diversified, as loans and guarantees are being emphasized more over the equity stakes in foreign markets. Through monthly data that RBI releases, great insight could be gained into how investments around the world were changing, especially since Indian firms change their preferences towards wanting to establish a stronger presence overseas.
Overall, although equity investment decreased, the growth in debt commitments would indicate a trend of more leveraged investment and especially that Indian businesses are grabbing opportunities in more global markets.
