ODI commitments for the July-September 2025 period dipped 13 per cent in the quarter and stood at $10.03 billion, compared to $11.54 billion in the same quarter last year.
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With rising global uncertainty, overseas direct investment (ODI) by Indian companies declined in the September quarter on a year-on-year (y-o-y) basis.
ODI commitments for the July-September 2025 period dipped 13 per cent in the quarter and stood at $10.03 billion, compared to $11.54 billion in the same quarter last year, according to RBI data.
Further, data from the Department of Economic Affairs showed that actual ODI flows have been softening from July 2025 onwards as the tariff tensions began.
The ODI outflow in June 2025 was $2.39 billion, $2 billion in July, and $1 billion in August. The corresponding flows for last year were $1 billion, $2.5 billion and $1.95 billion. However, actual outward FDI during April-August 2025 increased to $10.2 billion from $7.8 billion in the same period last year.
Uncertainty looms
Despite the softening of the ODI, the net foreign direct investment (FDI) into India fell steeply, to end at negative $0.62 billion in August, 2025, due to lower gross inflows compared to last year.
Experts note that the dip in ODI is due to corporates postponing fresh investments due to higher global uncertainty and that the trend may likely continue in FY26.
Paras Jasrai, Associate Director at India Ratings and Research, said that the tariff tensions picked up pace from July onwards, and this is also the time when consumption demand in the US started seeing strain.
“Till Indian companies get some clarity around the overall geopolitical and trade war scenario, they may hold back global investments in new projects,” he adds. In the short term, it may be positive for our FDI position, but Indian companies will need to invest globally for technological upgradation and expansion, he added.
Firms on the list
businessline analysis of the top companies that made outward FDI reveal that Tata Steel ($815 million), Advanta Enterprises ($500 million), Zydus group companies ($841 million), Prime Focus ($349 million), and Samvardhana Motherson ($230 million) were among the top ones in the September 2025 quarter.
While Tata Steel and Samvardhana Motherson have global operations and regularly invest in subsidiaries abroad, other ODIs seem to be one-time instances around acquisitions and technology transfer deals. In case of Tata Steel, industry sources noted that a substantial portion of ODI was towards onshoring overseas debt of the company. A portion was also to cover the restructuring cost of overseas businesses.
Advanta Enterprises completed a global restructuring in the period, Zydus inked deals for commercialising global technology, and Prime Focus increased stake in an international subsidiary.
Published on October 24, 2025