Indian companies are accelerating their global expansion through overseas direct investment (ODI), with remittances reaching a record $36 billion in the first 11 months of FY25.
This marks a 40% increase from the $25.2 billion outflow during the same period in FY24, and significantly higher than the $24.8 billion recorded in FY23, according to Reserve Bank of India (RBI) data.
February alone saw ODI flows of $5.35 billion — the highest monthly figure in at least 38 months — reflecting the growing appetite of Indian corporates to fund subsidiaries, acquire assets, and scale operations abroad amid uncertain global trade conditions following Donald Trump’s re-election as US President.
Singapore, US, UK top destinations
Singapore emerged as the top destination for Indian ODI, attracting 23% of the total outflows in FY25.
Indian firms often use Singapore as an intermediary jurisdiction due to its favourable tax treaties with various countries.
The United States ranked second, drawing 16% of the total ODI.
While the volume of transactions to the US is higher than that of Singapore, most remittances are small-ticket in nature, typically below $100 million.
These are largely from Indian companies in the services sector, especially information technology.
The United Kingdom and the United Arab Emirates followed, accounting for 12% and 10% of ODI flows, respectively.
Both regions received funds from a wider range of sectors, including manufacturing, logistics, metals, and minerals.
The Netherlands and Mauritius were also key recipients, underscoring the diversity of India’s overseas investment portfolio.
Vedanta, Sun Pharma lead high-value ODI deals
February’s $5.35 billion spike was driven by several large transactions, including Vedanta’s $1 billion remittance to its Mauritius-based subsidiary, THL Zinc.
This made it one of the largest ODI deals of the fiscal year.
In December, Sun Pharma infused $829 million into its Netherlands-based subsidiary, further contributing to the upward trend.
In October, Biocon Biologics issued guarantees for its joint venture in the UK, Biocon Biologics UK Ltd, marking one of the biggest UK-bound remittances during FY25.
These transactions illustrate how Indian conglomerates are utilising ODI to support international expansion plans and strategic investments, particularly in the pharmaceuticals and metals sectors.
ODI growth up 40% in FY25
The overall ODI flow of $36 billion so far in FY25 represents a more than 40% increase compared to the same period in FY24.
This growth far surpasses the $24.8 billion in total ODI recorded during FY23, indicating a notable shift in how Indian businesses are deploying capital globally.
Unlike the Liberalised Remittance Scheme (LRS), which allows individuals to send up to $250,000 overseas annually, ODI permits companies to remit up to $1 billion per year for specific corporate purposes.
These include equity investments, loans, and guarantees to overseas subsidiaries or joint ventures.
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