Page 23 - Policy Economic Report - March 2026

POLICY AND ECONOMIC REPORT
OIL & GAS MARKET

Capital Account

India has consistently attracted sizeable gross investment inflows, amounting to 18.5 per cent of GDP in
FY25, even amid tightening global financial conditions. According to UNCTAD data, India remained the
largest recipient of gross FDI inflows in South Asia and surpassed major Asian peers such as Indonesia
and Vietnam.

India ranked fourth globally in Greenfield investment announcements in 2024, with over 1,000 projects
and emerged as the largest destination for Greenfield digital investments between 2020-24, attracting
USD 114 billion. In April-November 2025, gross FDI inflows strengthened to USD 64.7 billion, compared
with USD 55.8 billion in April-November 2024. These highlights sustained investor confidence despite a
subdued global environment and reflects the underlying strength of India’s digital economy.

Exchange Rate

Indian rupee (INR) depreciated by approximately 5.4 per cent against the US dollar between 1 April 2025
and 15 January 2026. Economic Survey notes that currency performance is determined by the
economy’s ability to generate domestic savings, sustain external balance, attract stable FDI, and build
export competitiveness rooted in innovation, productivity, and quality.

External Debt

India’s external debt stood at USD 746 billion at end-September 2025, up from USD 736.3 billion at end-
March 2025 while the External Debt to GDP ratio stood at 19.2 percent at the end of September 2025.
Further, the external debt constitutes less than 5 per cent of the India’s total debt, which mitigates the
external sector risks.

7. India’s achievements in Free Trade Agreements for the year 2025-26
In last one decade, India has emerged decisive and confident: redrawing and redefining the map of
global trade and charting modern, future-ready, new generation of Free Trade Agreements (FTAs).

India has steadily expanded its network of free trade agreements over the past few years reaching nine
FTAs spanning 38 countries. Starting with India–Mauritius in 2021, the India–UAE Comprehensive
Economic partnership agreement followed in May 2022. India–Australia Economic and Trade Agreement
was implemented in December 2022. India then signed the EFTA TEPA on 10th March 2024, which
entered into force on 1st October 2025. The India–UK CETA was signed in July 2025 and India–Oman
CEPA in December 2025. The India–New Zealand FTA was announced on 22nd December 2025, followed
by the India–EU FTA on 27th January 2026. With United States, India has delivered framework for an
interim agreement on 7th February 2026 and cemented our global trade footprint.

These Agreements are for farmers whose products now have access to the developed world. They are
for entrepreneurs, women-led MSMEs exporting garments, leather, and handicrafts with new
competitiveness. They are for talent - young Indians, our students, IT professionals, chefs, yoga
instructors who now have choices and clear mobility pathways to work, to study and to build futures
supported by post-study work visas, mobility, and social security relief. They are for organic products

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