India’s outward FDI falls 14% in September

India's outward foreign direct investment (FDI) declined by 14% in September compared to the previous year, according to preliminary data released by the Reserve Bank of India (RBI). The figure dropped from $5.04 billion in September 2022 to $4.34 billion in the same period this year. The decline was even more pronounced month-on-month, with FDI falling 37% from $6.87 billion in August.

Equity commitments outside India saw a 20% drop to $3.26 billion in September from $4.10 billion in August. However, this was still higher than the $2.59 billion reported a year ago. On the lending side, loans extended to overseas subsidiaries rose to $549 million in September, up from $474 million in August. These loan figures, though, were lower than the $981 million reported in September 2022.

The RBI noted that the data is provisional and may be revised based on final reporting by banks. Outward FDI commitments consist of equity, loans, and guarantees. Notably, the number of guarantees issued fell sharply to $528 million, month-on-month, down to $2.29 billion from the $2.57 billion reported in August.

Equity outflows were primarily driven by Sun Pharma Laboratories, which committed $1.99 billion, followed by investments of $146 million by White Oak Investment Management and $48 million outflow by Knack Global Pvt Ltd. On the loan front, Highway Constructions transferred $80 million to its UK subsidiary, marking the highest single transfer during the month. Additionally, Paharpur Cooling Towers issued a $103 million guarantee to its Singapore subsidiary in September, as per the data.