Indian Firms Expand Global Footprint Despite Trump’s Trade Policies
Indian companies have significantly increased their overseas investments, reaching $36 billion in FY25, marking a 40% surge from the previous fiscal year, despite global trade uncertainty stemming from Donald Trump’s re-election as US President.
Data from the Reserve Bank of India (RBI) shows that in February 2025 alone, Indian firms remitted $5.35 billion abroad, the highest monthly outflow in at least 38 months. The United States, Singapore, and the United Kingdom emerged as the top destinations for these corporate fund flows.
RBI Data Shows Record-Breaking Overseas Investments by Indian Firms
According to the RBI’s Overseas Direct Investment (ODI) data, Indian companies have already surpassed previous years’ outflows:
FY25 (April 2024 – February 2025): $36 billion
FY24 (Full year): $25.2 billion
FY23 (Full year): $24.8 billion
This steep rise in ODI reflects Indian businesses’ aggressive global expansion strategy, particularly in IT, pharmaceuticals, manufacturing, and metals & mining sectors.
Understanding Overseas Direct Investment (ODI) and Its Implications
Overseas Direct Investment (ODI) is a special category of foreign remittance that allows Indian firms to expand globally by funding their foreign subsidiaries or acquiring assets abroad.
Unlike the Liberalized Remittance Scheme (LRS), which caps individual remittances at $250,000 per year, companies can send up to $1 billion annually under ODI.
ODI flows enhance Indian companies’ global presence, improve supply chain efficiencies, and help in securing strategic partnerships in foreign markets.
Singapore Leads as the Top Destination for Indian ODI
Singapore accounted for 23% of total ODI outflows in FY25, making it the largest recipient of Indian corporate funds.
The country serves as an intermediate financial hub, as companies first remit funds to Singapore before transferring them to their final investment destinations, leveraging its favorable tax treaties with other nations.
United States Becomes the Second Largest ODI Recipient
The US received 16% of India’s total ODI, securing its position as the second-largest investment destination for Indian firms.
The majority of Indian investments in the US came from the IT and services sectors, highlighting the growing importance of digital expansion and software exports.
Interestingly, while Singapore led in total remittance volumes, the US recorded the highest number of ODI transactions, though most were small-ticket investments below $100 million.
United Kingdom and UAE Among Other Key Investment Destinations
The United Kingdom accounted for 12% of India’s ODI, while the United Arab Emirates (UAE) captured 10%.
These investments were diversified across manufacturing, logistics, metals, and minerals industries.
Countries like Mauritius and the Netherlands also received significant Indian corporate investments, primarily due to favorable tax structures and ease of doing business policies.
Big-Ticket Transactions Driving ODI Growth
The sharp rise in Indian ODI in FY25 was driven by large corporate deals by leading Indian conglomerates:
1. Vedanta’s $1 Billion Investment in Mauritius Subsidiary
In February 2025, Vedanta Limited transferred $1 billion to its Mauritius-based subsidiary, THL Zinc, marking one of the largest ODI transactions of the year.
2. Sun Pharma’s $829 Million Infusion into Netherlands Subsidiary
In December 2024, Sun Pharmaceutical Industries invested $829 million in its Netherlands-based unit, reinforcing its global pharmaceutical expansion strategy.
3. Biocon Biologics’ UK Expansion
In October 2024, Biocon Biologics provided corporate guarantees to its UK-based joint venture, Biocon Biologics UK Ltd, facilitating its European market expansion.
Impact of Trump’s Trade Policies on Indian ODI
With Donald Trump returning to the US presidency in 2025, concerns about tariff hikes and trade restrictions have resurfaced. However, Indian firms continue to invest aggressively in the US, particularly in technology and pharmaceuticals.
Indian IT firms have accelerated investments in US-based operations, ensuring compliance with potential visa restrictions and trade policies.
Manufacturing and supply chain investments in the UAE and UK indicate diversification strategies to mitigate geopolitical risks.
Despite uncertainty in global trade policies, the rise in ODI suggests Indian firms are confident in their long-term global expansion.
