Indian Investment Abroad - Overseas Direct Investment by Indian Companies

Government Initiatives

The government has reduced the restrictions on Indian companies investing overseas by removing the cap on raising funding through the pledge of shares, local assets, and foreign assets to encourage international investment. In addition, improving the nation's social and economic stability enables RBI to support foreign investments and other international collaborations. One of the key elements of economic progress in every nation is its robust foreign investments. It demonstrates the confidence and trust that one country has in another and aids domestic companies to explore better worldwide networks, markets, technology, talents, and resources while enhancing their brand image. In this view, the government has undertaken several steps to support Indian investments abroad. Some of the initiatives are mentioned below:

• On March 5, 2026, India and Finland elevated bilateral ties to a Strategic Partnership in Digitalization and Sustainability during the state visit of Finnish President Alexander Stubb, strengthening cooperation across trade, technology, AI, climate action, and innovation. Both countries also set a target to double bilateral trade by 2030, supported by the India-EU FTA and growing collaboration in startups, clean energy, and digital transformation.
• On 24 February 2026, India and Israel commenced the first round of negotiations for the proposed Free Trade Agreement (FTA) in New Delhi, aimed at strengthening bilateral trade and economic cooperation. The agreement is expected to unlock significant opportunities across sectors such as technology, AI, cybersecurity, manufacturing, agriculture, and services, while providing greater certainty for businesses and MSMEs.
• On 24 February 2026, India and the Gulf Cooperation Council (GCC) formally launched negotiations for a comprehensive Free Trade Agreement (FTA), marking a significant milestone in strengthening bilateral trade and investment ties.
• On 22 February 2026, India and Brazil set an ambitious target to raise bilateral trade to US$ 30 billion by 2030, highlighting the growing strength of economic relations between the two countries. Both nations also agreed to expand cooperation across strategic sectors such as energy, satellites, biofuels, agriculture, healthcare, and sustainable aviation fuel, further strengthening long-term trade and investment ties.
• On 18 February 2026, India and France elevated their bilateral ties to a Special Global Strategic Partnership, marking a major step forward in cooperation across defence, critical minerals, advanced technologies, climate action, and economic security. The two countries also launched the 2026 India-France Year of Innovation, aimed at strengthening collaboration in AI, startups, research, and digital technologies.
• The India–US interim trade agreement marks a significant milestone in strengthening bilateral economic relations, enhancing market access, and boosting export competitiveness for Indian industries. The reduction in US tariffs to 18%, along with improved access across key sectors such as textiles, agriculture, technology, and manufacturing, is expected to create new growth opportunities for Indian exporters and MSMEs.
• India and Bhutan reaffirmed their long-standing partnership in the power sector, with discussions focused on accelerating key hydropower projects such as Punatsangchhu-I, Punatsangchhu-II, and Sankosh. Both countries also reviewed plans for cross-border transmission links up to 2040 to strengthen regional energy security and power trade.
• India strengthened bilateral cooperation with Vietnam in the silk, textiles, and technical textiles sectors through a five-day official visit led by the Central Silk Board and leading silk entrepreneurs. The visit focused on enhancing collaboration across sericulture, handlooms, handicrafts, and textile value chains, while also promoting participation in Bharat Tex 2026.
• India and the European Union have concluded negotiations for a comprehensive Free Trade Agreement (FTA), marking a major milestone in one of India’s most strategic economic partnerships. The agreement covers a combined market of Rs. 2,091.6 lakh crore (US$ 24 trillion) and provides preferential access for over 99% of India’s exports by trade value, significantly expanding trade opportunities. The FTA is expected to unlock substantial untapped trade potential, deepen market integration, and strengthen long-term economic ties between India and the EU.
• India and the European Union concluded negotiations for a Free Trade Agreement, unlocking access to the EU pharmaceuticals and medical devices market valued at Rs. 49.19 lakh crore (US$ 572.3 billion) and providing preferential, duty-free access for key ‘Made in India’ products.
• India–Oman Comprehensive Economic Partnership Agreement (CEPA) establishing a comprehensive framework covering trade in goods and services, investment, professional mobility, and regulatory cooperation. The agreement grants 100% duty-free market access for Indian exports across 98.08% of Omani tariff lines, covering 99.38% of export value, with benefits effective from Day One. The CEPA is expected to boost exports across engineering goods, pharmaceuticals, agriculture and processed food, marine products, textiles, chemicals, electronics, plastics, and gems & jewellery, while adopting a calibrated liberalisation approach to protect sensitive sectors, support MSMEs, and promote employment-led growth.
• India–New Zealand Free Trade Agreement (FTA) was concluded in December 2025, making it one of India’s fastest-negotiated FTAs. The agreement provides duty-free access on 100% of Indian exports to New Zealand and includes a US$ 20 billion investment commitment over 15 years, while safeguarding India’s sensitive sectors such as dairy and agriculture. It delivers major gains for labour-intensive sectors, including textiles and leather, introduces New Zealand’s first-ever Annex on Health and Traditional Medicine Services, and creates new student mobility and skilled visa pathways, including opportunities for up to 5,000 Indian professionals.
• The Italy–India Business Forum 2025 was held in Mumbai on 11 December 2025 during the visit of Italy’s Deputy Prime Minister Antonio Tajani, marking a key milestone in strengthening bilateral economic ties. The Forum focused on expanding trade, enhancing supply-chain resilience, and deepening cooperation across sectors such as automotive, clean energy, agri-food, sports technologies, and connectivity.
• India deepened its trade engagement with Latin America with the successful conclusion of the 9th round of India–Peru Trade Agreement negotiations in Lima (November 3–5, 2025) and the 3rd round of India–Chile Comprehensive Economic Partnership Agreement (CEPA) negotiations in Santiago (October 27–30, 2025). The discussions recorded substantive progress across key chapters, including trade in goods and services, rules of origin, investment promotion, technical and sanitary measures, intellectual property rights, dispute settlement, and critical minerals, reinforcing India’s strategic focus on expanding market access, strengthening supply chain resilience, and deepening economic integration with the Latin American region.
• The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement (TEPA), effective from October 1, 2025, marks a historic milestone as India’s first Free Trade Agreement (FTA) with four developed European nations, Switzerland, Norway, Iceland, and Liechtenstein. The pact commits Rs. 8,87,100 crore (US$ 100 billion) in investments and one million direct jobs over 15 years, making it the first Indian FTA with binding investment and employment targets.
• In July, 2025, India and the United Kingdom (UK) signed the Comprehensive Economic and Trade Agreement (CETA), eliminating tariffs on 99% of India’s exports and boosting bilateral trade valued at Rs. 4,96,272 (US$ 56 billion), with the goal to double it by 2030.
• On April 16, 2025, Union Minister of Commerce and Industry, Mr. Piyush Goyal, highlighted that the India-Middle East-Europe Economic Corridor (IMEC) will reduce logistics costs by up to 30% and transport time by 40%, positioning India as a trusted bridge of global connectivity.
• On April 2, 2025, India and Australia marked the third anniversary of the Economic Cooperation and Trade Agreement (Ind-Aus ECTA). Since its implementation, bilateral trade between the two countries has grown to Rs. 2,125.18 crore (US$ 24 billion), based on an exchange rate of Rs. 88.62 per US dollar.
• Indian government has declared the investment of Rs. 30 crore (US$ 3.5 million) to support developing countries in improving trade and building capacity, aiming to establish itself as a leader among Global South nations. Efforts will be cantered on people and diverse in approach, with a focus on sharing technology and offering favourable financing for projects.
• India and France are set to launch a collaborative fund supporting startups and climate-centric innovations in the Indo-Pacific. Stemming from the "Horizon 2047" joint vision statement, the Indo-Pacific Triangular Cooperation (IPTDC) fund will drive climate-focused innovations in third countries, aligning with the India-EU Connectivity Partnership.
• The Reserve Bank of India (RBI) issued new guidelines on August 22, 2022, to make foreign investment in shares, immovable properties, etc. easier for Indian retail investors. The new framework/guidelines comprise of Rules (framed by Central Government), Regulations, and Directions (issued by RBI)
• New definition of Overseas Direct Investment (ODI) and Overseas Portfolio Investment (OPI)
  • Overseas Portfolio Investment (OPI) and Overseas Direct Investment (ODI) are two different types of investment routes used by Indian investors to make foreign investments. Under the old regulations/directions, there was no clear distinction between OPI and ODI. Further, OPI was not defined, and under ODI, there was no specific mention of the percentage of equity holding proposed to be bought to qualify as ODI/OPI. Retail Investors faced difficulty in determining whether their investment in foreign entities constituted ODI requiring ODI compliance or OPI.
• The Confederation of British Industry (CBI), Britain’s largest business organisation, and its Indian counterpart, the Confederation of Indian Industry (CII), have agreed to set up a new joint commission to increase cross-industry collaboration and to push the trade deal over the line.