- Published on June 2, 2025
- In AI Features
As India’s FDI Plunges 96%, Startup Ecosystem Enters Reset Mode
‘The slowdown in Deep Tech funding is not a red flag — it’s a realignment. AI is rewriting the rules of capital efficiency, product maturity, and defensibility.’
- By Smruthi Nadig
The Indian startup ecosystem is set to face a stark reality as the country’s net foreign direct investment (FDI) dropped by a whopping 96.5% in FY2025. According to the RBI, it fell from $10.1 billion the previous year to just $353 million in May. The FDI has been on a steady sliding track since 2019.
The drop was attributed to increased repatriation, with $49 billion withdrawn from India in FY25, compared with $41 billion the previous year. The outflows are substantial due to numerous private equity sales and initial public offerings (IPOs).
Meanwhile, AI startups in the country raised $780.5 million in 2024, up from $280 million in 2023 and $560 million in 2022.
While cautious investor sentiment and economic uncertainties drove the funding m
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Smruthi Nadig
Smruthi brings over two years of experience in reporting on the global energy industry. They hold a Master's Degree from the University of Leeds in International Journalism and a Bachelor's Degree from Christ University in Media Studies, Economics and Political Science.
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