India's net foreign direct investment (FDI) inflows have contracted for five consecutive months, hitting negative $1.39 billion in January 2026, compared to negative $492 million in December 2025. This decline comes despite gross FDI inflows of around $5.7 billion, which fell by 6.9% year-on-year. The increase in repatriation by foreign investors, which nearly doubled to $4.9 billion, is attributed to a competitive global landscape where countries like Mexico, Poland, and Vietnam are becoming preferred destinations for nearshoring and friendshoring investments. Experts like Debasish Mishra from Deloitte South Asia highlight that the U.S. is capturing a significant share of technology-related investments, further complicating India's FDI scenario. The Indian government has implemented investor-friendly policies, allowing 100% FDI in most sectors under the automatic route. However, experts emphasize the need for tax certainty and improved ease of doing business to bolster investor confidence and attract more FDI in the future.