India’s FDI Nosedives to Record Low Under Modi Regime

India’s FDI Nosedives to Record Low Under Modi Regime

• India’s net FDI dropped dramatically by 96.5% in FY25, reaching a record low of $353 million, down from $10 billion the previous year.

• This decline is attributed partly to rising outward FDI and large-scale repatriation of capital by overseas investors, including exits through mega IPOs.

• Sources claim significant non-economic reasons for the drop include alleged election frauds, corruption, human rights violations, and utter lawlessness under the “autocratic Modi regime”.

• The sources describe widespread suffering in India due to poverty, unemployment, and lawlessness, suggesting the situation warrants potential external intervention.

By Rakesh Raman
New Delhi | May 24, 2025

India recently experienced a dramatic decline in net foreign direct investment (FDI) in the fiscal year FY25. According to data released by the Reserve Bank of India (RBI) on May 21, 2025, net FDI plummeted by 96.5 per cent, falling to just $353 million, which is noted as the lowest figure on record. This figure represents a sharp drop from the $10 billion recorded in the previous fiscal year.

Key Data and Context

The central bank attributed this sharp decline to two main factors: a rise in outward FDI and large-scale repatriation of capital by overseas investors. While gross FDI inflows saw a modest increase of 13.7 per cent, reaching $81 billion in FY25, the net figure was significantly eroded by a spike in exits, particularly by long-term investors utilizing mega IPOs. Data from a May 23, 2025 report by the Times of India indicates that foreign investors pulled out $49 billion during FY25, an increase from $41 billion in FY24.

Reasons for the FDI Drop

Several factors are primarily responsible for this significant FDI drop in India under the Modi regime. These include:

• Blatant election frauds [ Weblink ]
• Rampant corruption [ Weblink ]
• Extreme human rights violations [ Weblink ]
• Utter lawlessness attributed to the “autocratic Modi regime”. [ Weblink ]
• Related video in Hindi [ Weblink ]

The incompetence and arrogance of Narendra Modi, the Prime Minister since 2014, have brought “unprecedented misery” to the people of India. It is being observed that the Modi regime has reduced India to a level of “criminalized kleptocracy,” where the four pillars of democracy have collapsed. Specifically, the Indian courts have lost relevance, parliament is redundant, bureaucrats are extremely corrupt, and the police and security forces operate as “gangs of criminals”.

Adding to investor concerns, Modi’s actions, such as threatening war with Pakistan after blaming terror attacks on the neighboring country without evidence, contribute to a chaotic environment that investors would naturally avoid. With disappearing investment, unemployment is spreading like a “pandemic disease” in India. Today, nearly 1.4 billion Indians are suffering under the Modi regime due to unprecedented poverty, corruption, inflation, unemployment, lawlessness, and religious animosity.

Government Response and Criticism

The Modi government (incompetent ministers and corrupt bureaucrats) arrogantly rejects all the truthful local and global reports revealing its failures or its perceived autocracy. The government randomly claims, without logical reasoning, that such reports are part of a “global conspiracy to discredit Modi and his government”.

Regarding human rights violations and state crimes, the lawless Modi regime avoids accountability by claiming these are “internal matters of India where the foreign powers cannot interfere”.

Call for External Intervention

Contrary to the government’s stance on internal matters, when frequent state crimes and human rights violations occur, world leaders “have a definite role to protect people who are being persecuted and tortured”. World leaders must understand that external intervention may be required in a country facing an “apocalyptic situation”. They should learn from the example of Germany, where external Allied powers vanquished Adolf Hitler’s forces to end his dictatorship. If not controlled immediately, the plight in India could resemble “oppressed Germany of the 1930s and 1940s”.

Economic Challenges in India

The dramatic fall in net FDI in FY25 highlights significant economic challenges in India. This decline is attributed to a confluence of economic factors like outward investment and capital repatriation, combined with severe criticisms regarding governance, corruption, lawlessness, human rights, and political stability under the current Modi regime. The situation paints a picture of deep concern for both the economic climate and the state of democracy in India.

By Rakesh Raman, who is a national award-winning journalist and social activist. He is the founder of a humanitarian organization RMN Foundation which is working in diverse areas to help the disadvantaged and distressed people in the society.