Indian Economy News

India remains the world’s largest recipient of remittances, with inflows reaching US$ 135.4 billion in FY25

The external sector of India continues to demonstrate its strength and resilience, as discussed in the Economic Survey 2025-26, which was tabled in Parliament by Union Finance Minister Ms. Nirmala Sitharaman. The Survey points out that India continued to be the largest recipient of remittances, with receipts of US$ 135.4 billion in FY25, which helped to stabilize the current account position despite the merchandise trade deficit. During the first half of FY26, the current account deficit decreased to US$ 15 billion from US$ 25.3 billion in H1 FY25, due to strong net invisible earnings that more than offset the trade deficit. India continued to maintain its position as the largest recipient of gross FDI inflows in South Asia, ahead of other countries such as Indonesia and Vietnam, and ranked fourth globally in Greenfield investment announcements in 2024 and emerged as the largest destination for Greenfield digital investments, attracting investments of US$ 114 billion. Gross FDI inflows during April-November 2025 were US$ 64.7 billion, higher than the previous year’s US$ 55.8 billion, indicating continued investor confidence.
Regarding external resilience, the foreign exchange reserves of India increased to US$ 701.4 billion as of January 16, 2026, from US$ 668 billion at end-March 2025, which provided cover for about 11 months of merchandise imports and about 94% of external debt. The external debt of India stood at US$ 746 billion at the end of September 2025, with the external debt-to-GDP ratio at 19.2%, and external debt constituting less than 5% of total debt of India, thus reducing the risk exposure to the external sector. The Survey underscores that manufacturing costs should be reduced and export competitiveness improved through disciplined industrial policy, productivity, and a stronger services sector, all of which are aimed at improving the strength of the external balance and currency credibility. 

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