Q2 equity FDI down 11% as tech, services lose steam

Foreign Direct Investment (FDI) inflows through the equity route fell 11% to $16.5 billion in the July-September quarter compared with the preceding quarter, largely due to softer performance in services and computer hardware and software — sectors that traditionally attract the most overseas investment. However, inflows during the second quarter were 21.6% higher than the same period last year. For the first half of 2025-26, FDI in equity rose 18% year-on-year to $35.18 billion, data compiled by the Department of Promotion of Industry and Internal Trade showed. The computer hardware and software sector received $9.04 billion in FDI in April-September, surpassing the $7.8 billion it attracted in the entire 2024-25 fiscal year. The pharmaceutical sector also saw a rise, with inflows of $1.2 billion in the first six months, up from $891 million a year earlier. Services sector The services sector drew $5.09 billion in FDI during April-September. This sector covers financial, banking, insurance, non-financial business services, outsourcing, research and development, courier, technology, testing, and analysis. The auto industry received $1.5 billion, trading $2.7 billion, while non-conventional energy attracted $1.9 billion in FDI during the period. Who is the largest contributor to FDI in India? Singapore remained the largest source of FDI, contributing $11.9 billion, followed by the US with $6.6 billion and Mauritius at $3.4 billion. Total FDI inflows, which include reinvested earnings and other capital, stood at $50.6 billion, up 16.14% year-on-year. Net FDI in April-September doubled to $7.6 billion from $3.4 billion in the same period last year, according to Reserve Bank of India (RBI) data.