Between April and September 2025, Indian businesses significantly expanded their global footprint, making Overseas Direct Investment (ODI) worth USD 24,696.84 million.
This represents a 17% year-on-year increase, underlining strong outbound investment momentum despite global economic uncertainty.
For FEMA advisors, international tax professionals, CFOs, and cross-border consultants, these trends offer critical insights into how Indian companies are deploying capital overseas—and how investment strategies may evolve in FY 2026.
Understanding these patterns is essential for structuring compliant, strategic, and tax-efficient overseas investments under the FEMA (Overseas Investment) Rules, 2022.
Overall ODI Breakdown: How India Deployed Capital Overseas
India’s total ODI commitment of USD 24,696.84 million was distributed across three key instruments:
| Type of Overseas Financial Commitment | Amount (USD Million) |
|---|---|
| Equity | 10,800.04 |
| Loan | 4,795.41 |
| Guarantee Issued | 9,101.40 |
| Total Financial Commitment | 24,696.84 |
Key Insight
- Equity remains the largest component of ODI
- Corporate guarantees account for ~36% of total commitments, reflecting how Indian parent companies are supporting overseas subsidiaries in accessing global financing
A FEMA advisory team plays a crucial role in helping companies balance equity, loans, and guarantees while remaining compliant with ODI regulations.
Top Countries Receiving India’s ODI (Apr–Sep 2025)
Indian investments were geographically diverse, but a few global hubs dominated.
Country-Wise ODI Distribution
| Country | Equity | Loan | Guarantee | Total ODI (USD Mn) |
|---|---|---|---|---|
| Singapore | 3,613.37 | 625.72 | 1,688.23 | 5,927.32 |
| United States | 1,787.04 | 406.19 | 494.87 | 2,688.10 |
| Mauritius | 920.50 | 1,126.74 | 2,073.51 | 4,120.75 |
| Sri Lanka | 800.44 | 217.56 | 0.10 | 1,018.09 |
| United Kingdom | 788.93 | 178.74 | 875.49 | 1,843.16 |
| United Arab Emirates | 582.92 | 631.90 | 473.07 | 1,687.90 |
| Netherlands | 377.36 | 579.10 | 2,219.67 | 3,176.12 |
| Luxembourg | 348.86 | – | – | 348.86 |
| Germany | 312.79 | 30.71 | 14.78 | 358.28 |
| Mozambique | 141.19 | 0.60 | – | 141.79 |
Key Observations
✔ Singapore remains India’s top ODI destination due to tax efficiency, SPV-friendly regulations, and ease of doing business
✔ Mauritius and Netherlands continue to attract fund-routing, holding, and acquisition SPVs
✔ USA and UK draw technology, IT, and service-sector investments
✔ UAE and Sri Lanka see strong Indian participation in retail, infrastructure, and services
These jurisdictions align closely with RBI’s ODI guidelines on treaty benefits and regulatory transparency.
Sector-Wise ODI: Where Indian Capital Is Flowing (Equity)
Indian outbound investments are concentrated in high-value and future-oriented sectors.
| Sector | Equity Investment (USD Mn) |
|---|---|
| Financial, Insurance & Business Services | 5,922.90 |
| Manufacturing | 1,199.25 |
| Wholesale, Retail, Restaurants & Hotels | 878.40 |
| Electricity, Gas & Water | 801.81 |
| Community, Social & Personal Services | 752.40 |
| Agriculture & Mining | 726.88 |
| Transport, Storage & Communications | 325.84 |
| Construction | 188.25 |
| Miscellaneous | 4.29 |
Sector Insights
✔ Financial & business services dominate ODI, reflecting global expansion of fintech, NBFCs, consulting, and IT services
✔ Manufacturing and energy investments support global supply-chain integration
✔ Retail, hospitality, and logistics remain stable outbound sectors
FEMA advisors must assess sector-specific caps, reporting obligations, and restrictions under the Overseas Investment Regulations, 2022.
Country-Wise Sector Activity: Strategic Patterns
Highlights
- Singapore leads across sectors
- USD 2.25 billion in financial & business services
- USD 784.50 million in energy & utilities
- USD 265.58 million in retail & hospitality
- USA attracts service-heavy ODI
- USD 1.43 billion in financial/business services
- USD 152.80 million in personal & social services
- Mauritius records strong activity in agriculture & mining
- USD 500.27 million, reinforcing its role as a holding hub for African investments
- Netherlands sees high guarantees (USD 2.2 billion)
- Primarily for global acquisition SPVs
- UAE receives diversified investments across trade, logistics, and manufacturing
These patterns are critical when structuring SPVs, ODI-FDI linkages, and LRS compliance.
What These ODI Trends Mean for Indian Businesses
1. Bigger & Bolder Global Expansion
A 17% growth signals strong outbound confidence despite global volatility.
2. Strategic Jurisdictions Still Dominate
Singapore, Mauritius, Netherlands, and UAE remain preferred due to:
- Robust bilateral tax treaties
- Ease of operations
- Access to global capital markets
3. Financial Services, Energy & Tech Lead
These sectors align with India’s global ambitions in clean energy, fintech, SaaS, and services exports.
4. Guarantees Are a Key ODI Tool
Guarantees help overseas subsidiaries raise funds without triggering ECB rules—but must be carefully structured to avoid FEMA violations.
Why FEMA Compliance Is More Critical Than Ever
Incorrect ODI structuring can lead to:
- Compounding penalties
- Restrictions on future overseas investments
- Enforcement agency scrutiny
- Mandatory restructuring of overseas SPVs
Working with Experienced FEMA Advisors Ensures:
✔ Correct ODI routing
✔ FEMA-compliant SPV structures
✔ Adherence to sectoral caps & reporting timelines
✔ Prevention of unintentional round-tripping
Final Takeaway
India’s Apr–Sep 2025 ODI trends highlight a confident economy expanding across financial services, manufacturing, energy, hospitality, and retail.
For CEOs, CFOs, and global expansion teams, a well-planned, FEMA-compliant overseas strategy is essential.
For consultants and advisors, this data offers valuable insight into structuring outbound investments for the coming financial year.
As global opportunities grow, partnering with an experienced FEMA consultant ensures international expansion without regulatory setbacks.
