The [Reserve Bank of India](/topic/rbi) (RBI) has published the provisional results of the 2025-26 census on foreign liabilities and assets (FLA), providing a comprehensive overview of the cross-border financial activities of Indian entities. This annual census, which encompasses companies, limited liability partnerships (LLPs), alternative investment funds (AIFs), and partnership firms, captures critical data regarding foreign liabilities and assets associated with inward and outward direct investments. The findings reveal significant trends and shifts in the landscape of foreign direct investment (FDI) and overseas direct investment (ODI) in India.
Overview of Foreign Liabilities and Assets
The FLA census is pivotal for understanding the financial health and international engagement of Indian entities. It encompasses various forms of investments, including direct investments, portfolio investments, and other financial instruments such as trade credit, loans, and deposits. According to the RBI's report, the census captures detailed information on the outstanding foreign liabilities and assets, which reflects not only the direct investments but also the broader economic interactions between Indian entities and foreign counterparts.
As of March 2026, approximately 97% of the entities reporting FDI and ODI were unlisted, indicating a significant concentration of foreign investment in private companies. These unlisted entities also accounted for a substantial portion of the total FDI equity capital in India, highlighting their importance in the investment landscape. Non-financial companies dominated the FDI equity, comprising over 90% of the total at face value, underscoring the critical role of this sector in attracting foreign capital.
Key Metrics and Trends in FDI and ODI
The census results indicate a moderation in the ratio of inward FDI to ODI, which decreased from 5.5 times in the previous year to 4.2 times as of March 2026. This shift suggests a changing dynamic in how Indian entities engage with foreign markets, with a notable increase in outward investments. The data also reveals that other investment liabilities, including trade credit and loans, grew by 11.9% year-on-year, while other investment assets rose by 16.1% during the same period. This growth reflects a robust engagement of Indian entities with international markets, further diversifying their investment portfolios.
| Category | Types of Entities | Number of Entities with Direct Investment | ||
|---|---|---|---|---|
| Both Inward and Outward | Only Inward | Only Outward | Total | |
| Unlisted | Foreign Associate companies in India | 560 | 6,091 | 6,651 |
Leading Sources and Destinations of FDI and ODI
The census also sheds light on the geographical distribution of foreign investments. The United States emerged as the leading source of outstanding FDI, contributing 16.5% of the total, followed by Mauritius (14.5%), Singapore (13.7%), and the United Kingdom (10.8%). This trend highlights the ongoing significance of these nations as key partners in India's economic growth.
In terms of ODI, Singapore, the United Arab Emirates, and the United States collectively accounted for over 50% of the total outward investments. This concentration of investments in specific regions indicates strategic economic relationships that Indian entities are cultivating abroad, particularly in markets that offer growth opportunities.
Sectoral Distribution of FDI
The manufacturing sector has emerged as the largest recipient of FDI, holding a market value share of 50.1% of the total outstanding FDI equity capital. The services sector follows closely, accounting for 45% of the total. This distribution underscores the importance of these sectors in driving economic growth and attracting foreign investments. The data suggests that as India continues to develop its manufacturing capabilities, it is likely to attract even more foreign capital, particularly in high-value sectors.
The census results also indicate a balanced market value share between listed and unlisted companies in total FDI equity capital. However, a staggering 96.6% of the FDI debt is held by unlisted companies, emphasizing the reliance of these private entities on foreign financing to support their growth initiatives.
Conclusion and Future Implications
The findings from the 2025-26 FLA census provide crucial insights into the evolving landscape of foreign investments in India. As the country continues to integrate into the global economy, understanding these dynamics will be essential for policymakers and business leaders alike. The data not only highlights current trends but also sets the stage for future investment strategies and economic planning.
The RBI's ongoing efforts to monitor and report on foreign liabilities and assets will play a vital role in shaping India's economic policies and fostering a conducive environment for foreign investments. As the global economic landscape continues to shift, the insights gained from this census will be invaluable in navigating the complexities of international finance and investment.
