Indian companies announced overseas equity investments worth $14bn in the first four months of FY2026, nearing the $18.7bn spent all of last year, while foreign investors pulled out $23bn by June. The rupee has fallen over 6% against the dollar, becoming one of Asia’s weakest currencies as the Iran war lifts India’s energy bill.

In April Sun Pharma unveiled its $11.7bn purchase of US‑based Organon, India’s largest ever international deal, aiming to reach new markets including China. In June Persistent Systems launched a €1.3bn bid for Munich‑based Nagarro to diversify beyond a US‑centric client base amid Trump’s tariff unpredictability.

Legal adviser Minhaz Lokhandwala said firms are also eyeing Middle‑East manufacturers to hedge against Strait of Hormuz disruptions. Morgan Stanley warned that sustained net‑FDI outflows could force reliance on volatile portfolio capital, threatening currency stability. The government’s chief economic adviser V Anantha Nageswaran and MP Bhartruhari Mahtab expressed concern that domestic capex isn’t keeping pace.

Analyst Saurabh Mukherjea predicts negative net FDI for years, with major implications for the economy and the rupee.