Recent Current Affairs related to FDI

RBI has approved the scheme of amalgamation to merge the Indian branches of Dubai-based Emirates NBD Bank (National Bank of Dubai) with RBL Bank Ltd, effective December 1, 2026.

The Cabinet Committee on Economic Affairs (CCEA) has approved the sale of a 60.72% stake in IDBI Bank Ltd to 10955230 Canada Inc, a subsidiary of Fairfax Financial Holding. Valued at ₹52,878 crore, this proposed transaction marks the largest Foreign Direct Investment (FDI) in the financial sector of India.

The Central Government has notified amendments to the India-Mauritius Double Taxation Avoidance Agreement (DTAA) to prevent treaty abuse and tax avoidance. The amended treaty, whose protocol was signed in 2024, introduces the Principal Purpose Test (PPT) and came into force on August 10, 2026.

Following the amendment, Mauritius-based investors and investment funds claiming treaty benefits may face increased scrutiny regarding the commercial substance and purpose of their transactions.

The Department for Promotion of Industry and Internal Trade (DPIIT), under the Ministry of Commerce and Industry, has marked the 12th anniversary of the ‘Make in India’ initiative.

Launched in 2014, the scheme aims to position India as a global hub for manufacturing, design, and innovation. The initiative covers a total of 27 sectors, which includes 15 manufacturing sectors and 12 service sectors.

According to the monthly bulletin of the RBI, the net Foreign Direct Investment (FDI) into India reached a five-year high of $7.35 billion in July 2026. This is the highest recorded inflow since May 2021 when it stood at $8.80 billion.

The net FDI in July 2026 represents a 64% increase compared to the same period in the previous year. The cumulative net FDI for the period from April to July 2026 reached $13.4 billion.

Union Minister Piyush Goyal has announced that the India-New Zealand Free Trade Agreement (FTA) will come into force on October 20, 2026, following the completion of ratification and domestic processes in both countries.

From the date of implementation, 100% of exports from India to New Zealand will receive duty-free access, benefiting key sectors such as textiles and apparel, leather and footwear, gems and jewellery, engineering goods, and processed foods.

Union Minister Piyush Goyal and Sheikh Hamed bin Zayed Al Nahyan, the MD of Abu Dhabi Investment Authority (ADIA), have co-chaired the 14th meeting of the India-UAE High Level Joint Task Force on Investments (HLJTFI) in Mumbai. It is to be noted that the HLJTFI was established in 2013.

Additionally, the second India-Fiji Bilateral Joint Working Group (JWG) meeting was held in New Delhi, with both nations discussing various areas of mutual interest.

India is ranked top in business climate among 41 global markets in the “Global Business Climate Survey 2026”, demonstrating strong confidence among Swedish companies operating in India. Ireland is ranked second, followed by Vietnam.

Tata Capital Ltd (TCL) has signed an MoU with Japan-based Resona Bank, the core banking subsidiary of Resona Holdings, to assist Japanese companies in exploring and accessing financial solutions and business opportunities in India.

Bank of America Corporation (BofA) has entered into a Joint Venture (JV) agreement with Jio Financial Services Ltd (JFSL). Under the JV, BofA will acquire up to a 49.9% stake in Jio Credit Ltd (JCL).

The Tamil Nadu government has signed 4 MoUs with leading global companies to facilitate the establishment of Global Capability Centres (GCCs), Research & Development (R&D) centres, and a manufacturing facility.

As part of these agreements, the state government has also signed an MoU with the University of Western Australia (UWA) to establish its India campus in Velachery, Chennai, with an investment of ₹125 crore.

According to provisional data released by the RBI, India's outward Foreign Direct Investment (FDI) declined by 47.9% year-on-year (Y-o-Y) to $3 billion in June 2026, compared to $5.74 billion in June 2025.

The decline was observed across all three components of outward FDI commitments: equity, debt, and guarantees. In June 2026, equity commitments stood at $738 million, debt at $469.87 million, and guarantees at $1.78 billion. The largest FDI equity commitments were recorded by ONGC Videsh Rovuma Ltd (OVRL), followed by Lenskart and GFCL EV products.

UK-based Aviva Plc has acquired the remaining 26% stake in Aviva Life Insurance Company India Ltd (Aviva India) from its Joint Venture (JV) partner, Dabur Invest Corp. (DIC).

With this, Aviva Plc has become the first foreign insurer to fully own its life insurance business in India.

According to the "2026 World Investment Report: International Investment in a Turbulent Era" released by the UN Trade and Development (UNCTAD), India is ranked 11th globally as an FDI recipient, with inflows surging by 44% to $38.89 billion in 2025.

In terms of FDI outflows, India is ranked 18th, with outflows increasing by 47% to $35.66 billion. Global foreign direct investment (FDI) inflows increased by 6% to $1.6 trillion in 2025.

The USA remained the world's largest FDI destination with $277 billion, followed by Singapore and Hong Kong. The USA was also the world's largest source of FDI with a total outflow of $263 billion, followed by Japan, China, Luxembourg, and Hong Kong.

Adani Enterprises Ltd (AEL) and International Resources Holding (IRH), a part of the International Holding Company (IHC) group, have signed an MoU with the Odisha government on setting up an integrated greenfield aluminium project with an investment of $11.5 billion (₹1.08 lakh crore).

Japan-based SoftBank Group has divested a 3.25% stake in Lenskart Solutions through its affiliate SoftBank Vision Fund II (SVF II) Lightbulb (Cayman) Ltd. The transaction was executed through the sale of 5.65 crore shares.

Prudential plc, a UK-based insurer and asset manager, has announced plans to acquire a 75% stake in Bharti Life Insurance Company Ltd for an initial value of ₹3,500 crore ($389 million).

Under the transaction, the company will buy a 60% stake from Bharti Life Ventures Pvt Ltd and the remaining 15% stake from funds managed by 360 ONE Asset Management.

The USA-based Liberty Mutual Insurance Company (LMIC) has increased its stake in Liberty General Insurance (LGI) from 55.4% to 74%. LGI is a joint venture (JV) between the Liberty Mutual Group (LMG) and Enam Securities, with the latter holding the remaining 26% stake.

This expansion strengthens the presence of the company in the insurance sector of India, facilitated by the approval of 100% Foreign Direct Investment (FDI) in the industry by the Government of India (GoI).

According to a report titled “Economic and Social Survey of Asia and Pacific 2026: Socioeconomic Prosperity Amid the Transition to an Environmentally Sustainable Economy” released by the UN Economic and Social Commission for Asia and the Pacific (ESCAP), the economy of India is projected to grow at 6.4% in Calendar Year 2026 (CY26) and 6.6% in CY27.

The inflation of India is expected to reach 4.4% in CY26 and 4.3% in CY27. The growth rate of the South and South-West Asia region is estimated at 5.4% in CY25, which is an increase from 5.2% in CY24. During the first three quarters of CY26, India attracted the largest share of greenfield Foreign Direct Investment (FDI) worth $50 billion. It is followed by Australia, Republic of Korea, and Kazakhstan.

The Maharashtra government has signed an MoU with the Vietnam based Vingroup to explore strategic investments across multiple sectors in the state. The proposed investment is worth $6.5 billion (₹54,000 crore) and will be executed over a period of 2 years.