India’s overseas investment surges to $6.8 billion in April, highest in a year #IndiaFinance

According to data from the Reserve Bank of India’s Foreign Exchange Department, India’s OFDI rose strongly in April 2025 to USD 6.81 billion.

OFDI refers to investments made by a resident or company of one country into business interests located in another country. In simple terms, it is when Indian companies invest money abroad to set up businesses, acquire foreign companies, or expand their operations outside India.

The rise in OFDI was led by a sharp increase in equity investments and guarantees issued to overseas ventures. Equity commitments touched USD 2.72 billion in April, slightly up from USD 2.54 billion in March, and more than three times higher than April 2024 (USD 740 million). Guarantees issued also surged to USD 2.92 billion—more than double from that of March. This sharp rise in guarantees could indicate that Indian firms are supporting their foreign subsidiaries or joint ventures in securing loans or financial obligations.

However, loan commitments dropped to USD 1.16 billion in April from USD 2.13 billion in March. While this dip suggests some caution in direct lending to foreign units, it may also reflect a shift in strategy towards equity-driven expansion. Overall, the April figure is a 15% increase over March 2025 and almost double the amount recorded in April 2024 (USD 3.59 billion).

RBI, in its press release, says, “The data is provisional and based on reports submitted by authorised dealer banks as of May 7, 2025. It may change slightly as banks continue to update their reporting.”

OFDIs can be in different forms such as:

Equity: Buying a stake in a foreign company.

Loan: Giving a loan to a foreign subsidiary or joint venture.

Guarantee: Offering financial support by guaranteeing a loan or obligation taken by a foreign company linked to the Indian investor.

Suppose X Motors, an Indian company, decides to expand its presence in Europe. It invests USD 500 million to set up a manufacturing plant in Germany. This investment includes buying land and building the factory, purchasing machinery, and hiring local staff. This entire investment by X Motors in Germany is considered OFDI from India.

Another way is when a company, say Y, gives a loan to its wholly owned subsidiary in the U.S. or issues a guarantee to help that subsidiary get a local loan. These are also counted under OFDI.