India's overseas direct investment commitments dropped 37 percent to USD 4.34 billion in September 2026, primarily due to a sharp decline in guarantees issued by Indian firms despite a rise in net FDI inflows during the fiscal period.
India Sees Decline in Overseas Direct Investment Commitments
India's overseas direct investment commitments declined by nearly 37 per cent to USD 4.34 billion in September 2026, compared with USD 6.87 billion in August, mainly due to a sharp fall in guarantees issued by Indian companies, according to data released by the Reserve Bank of India (RBI) on Monday.
According to the RBI's Summary of Outward Foreign Direct Investment (OFDI) based on Reporting Date – September 2026, guarantees issued by Indian companies for overseas investments fell sharply to USD 528.21 million in September from USD 2.29 billion in August, a decline of nearly 77 per cent.
Breakdown of Investment Categories
Equity and Loan Commitments
Equity commitments also declined to USD 3.27 billion in September from USD 4.11 billion in the previous month, representing a fall of around 20 per cent. However, equity commitments were nearly 26 per cent higher than the USD 2.59 billion recorded in September last year, indicating stronger year-on-year equity investment commitments despite the monthly slowdown. Meanwhile, loan commitments increased to USD 549.16 million in September from USD 473.52 million in August, registering a rise of nearly 16 per cent. The decline in overall overseas investment commitments was therefore largely driven by lower guarantees, rather than a uniform fall across all investment categories.
Context on Financial Commitments and FDI Inflows
The RBI stated that "the data is provisional and subject to change based on online reporting by AD banks." Overseas financial commitments include equity investments, loans and guarantees provided by Indian entities to their foreign subsidiaries and joint ventures. These commitments do not necessarily represent actual cash outflows during the month. The latest figures come at a time when India's net foreign direct investment inflows have strengthened, supported partly by a moderation in outward investment. According to the RBI's October 2026 Bulletin, net FDI inflows increased to USD 13.8 billion during April-August FY27 from USD 9.6 billion in the corresponding period last year. The central bank noted that a slowdown in the pace of outward FDI along with sustained higher gross FDI inflows supported net FDI flows. (ANI)
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