Russia Tripled Equity Investment in India in FY25: Key Highlights

Ripradaman R
Dec 3
2 min read

Introduction

Russian equity inflows into India rose sharply in FY25, even as total foreign investment weakened.

The jump is linked mainly to higher trade volumes and rupee-based settlement.

With unused rupee balances building up, Russia deployed more funds into Indian markets.

Here is a clear breakdown of what changed and why it matters.

Russian Inflows Hit a Four-Year High

Russian equity investments reached USD 18.45 million in FY25, up from USD 5.16 million in FY24.

This is more than triple the previous year’s figure.

Key points:

• Russia was among the few countries with rising equity inflows

• The increase came during a dip in India’s overall FDI

• The trend is significant given global limits on Russian capital

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Why the Jump Happened

The core driver is the large pool of rupees Russia holds due to higher oil trade with India.

What changed:

• India imports more Russian oil

• Payments often use rupee settlement

• Russia accumulates unused rupee balances

• These balances are redirected into Indian assets

How Rupee Balances Turn Into Investments

Countries holding rupees from trade need productive ways to use them.

Investing in Indian markets becomes the easiest and fastest option.

How it works:

• Trade leads to growing rupee holdings

• Idle balances push investors to seek returns

• Equity and debt markets offer simple deployment avenues

• This results in short-term capital inflows

Impact on Indian Markets

The inflows are small in value but meaningful in direction.

Effects include:

• More diverse foreign investor activity

• Higher liquidity in select sectors

• Strengthening of India–Russia financial links

• Increased focus on trade-linkend

Sectors That May Gain

Russian exposure usually aligns with trade and energy linkages.

Potential beneficiaries:

• Energy and petrochemicals

• Infrastructure

• Manufacturing

• Rupee-settlement financial products

What to Track Next

Future inflows will depend on:

• India–Russia trade momentum

• Rupee settlement policies

• Geopolitical conditions

• Regulatory clarity on capital movement

Conclusion

Russian equity inflows into India tripled in FY25, driven largely by rising bilateral trade and growing rupee settlements.

Though modest in value, the shift marks a new pathway for cross-border capital.

The coming year will show whether this becomes a steady inflow pattern or a short-term adjustment.

FAQ

1. Why did Russian inflows rise in FY25?

Because Russia used surplus rupee balances from trade to invest in Indian assets.

2. Is the inflow amount large?

No, but the growth is significant and signals a trend shift.

3. Did India’s overall FDI increase?

No. Total FDI fell, making Russia’s rise more notable.

4. Which sectors may benefit?

Energy, infrastructure, manufacturing and rupee-linked financial products.

5. Will this inflow trend continue?

It depends on trade levels, rupee settlement norms and geopolitical stability.

Citations

• FY25 foreign investment data from financial publications

• Trade and rupee settlement reports from business media

• India–Russia economic cooperation analyses

• Market commentary by economic researchers

• Briefings from official trade and policy sources