"This makes the argument of some sceptics fall flat on its head since it was being contended that Indian firms were investing abroad because of the policy paralysis at home," the Assocham study said.
Net foreign investment by India to the rest of the world stood at $952 million in the first half of the current fiscal, which is far less than $3.4 billion in the same period last year, an Assocham study said.
On the other hand, between April-September of 2013-14, the money repatriated home by Indian businesses was much higher at $3.23 billion than $2.29 billion in the comparable period of the previous fiscal, as per official data.
"The numbers clearly show how the bogey raised by some people that fresh investment was going outside the country is without any foundation... On the contrary, investments have declined both in the domestic economy and the international markets," Assocham President Rana Kapoor said.
Moreover, portfolio investment outflows by Indians were negative to the extent of $191 million in the first half of FY 2013-14, which implies that domestic investors pulled back money from the overseas markets, against a positive portfolio investment of $581 million in the same period last fiscal.
A portfolio investment is a passive investment in securities, which entails no active management or control of the securities by the investor. A portfolio investment is an investment made by an investor who is not particularly interested in involvement in the management of a company.
The net FDI by Indians globally in 2012-13 was robust at $7.13 billion. However, going by the H1 trends, the money going abroad as FDI could exceed $2 billion, the study said.
"Although because of the financial stress in most parts of the world the assets are going rather cheap, the propensity to buy them is also less along with the increasing risk aversion. Besides, a few companies in India are cash-surplus as most of them are highly debt-leveraged," it said.
Even in terms of pure equity play, the FDI (foreign direct investment) by Indians abroad was much less in the first half of 2013-14 at $1.78 billion as against $2.91 billion during the corresponding period last fiscal.