Friday, 20 Jun, 2025
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Foreign Direct Investment (FDI) into India’s services sector witnessed a sharp increase of 40.77 percent in FY 2024–25, rising to $9.35 billion from $6.64 billion the previous year.
Foreign Direct Investment (FDI) inflows into India have continued their upward trajectory, rising from $36.05 billion in the financial year 2013–14 to a provisional $81.04 billion in FY 2024–25, according to data released by the Ministry of Commerce and Industry on Tuesday.
This marks a 14 percent increase over the $71.28 billion recorded in FY 2023–24. The services sector led the pack as the largest recipient of FDI equity during the fiscal year, accounting for 19 percent of the total inflows. It was followed by the computer software and hardware segment, which attracted 16 percent, while the trading sector also featured among the top recipients, though its share was not specified.
Foreign Direct Investment (FDI) into India’s services sector witnessed a sharp increase of 40.77 percent in FY 2024–25, rising to $9.35 billion from $6.64 billion the previous year. The manufacturing sector also saw a notable boost in FDI, growing by 18 percent to $19.04 billion, compared to $16.12 billion in FY 2023–24.
Maharashtra emerged as the top destination for FDI equity inflows, attracting 39 percent of the total, followed by Karnataka with 13 percent and Delhi with 12 percent.
On the global front, Singapore remained the leading source of FDI into India, accounting for 30 percent of the total inflows. Mauritius followed with 17 percent, while the United States contributed 11 percent.
Over the past eleven financial years (2014–25), India has drawn a cumulative FDI inflow of $748.78 billion, a surge of 143 percent compared to $308.38 billion recorded during the earlier period. This accounts for nearly 7 percent of global FDI during that span.
Source: Ministry of Commerce and Industry
Foreign Direct Investment plays a pivotal role in driving India’s economic development, serving as a significant non-debt financial source for the country’s growth initiatives. Global companies are increasingly directing their investments toward India, attracted by advantages such as tax benefits and relatively low labor costs. These investments not only bring in advanced technology but also contribute to employment generation and other economic benefits. The consistent rise in FDI can be attributed to the government’s forward-looking policy measures, a vibrant business landscape, improved global competitiveness, and India’s expanding economic stature.
To further boost FDI inflows, the Indian government has introduced several policy reforms and initiatives. Among the most prominent is the “Make in India” campaign, which aims to streamline regulatory processes and create an investor-friendly environment across multiple sectors. Key strategies have included the liberalization of FDI rules in areas like retail, defence, insurance, and single-brand retail trade. The introduction of the Goods and Services Tax (GST) has enhanced transparency in the taxation system, while Special Economic Zones (SEZs) offer dedicated hubs with tax incentives to attract foreign investors.
India has achieved a major milestone in its economic journey, with cumulative gross Foreign Direct Investment (FDI) inflows reaching an impressive ₹86.87 lakh crore (US$ 1 trillion) since April 2000. This accomplishment has been further bolstered by a nearly 26 percent surge in FDI during the first half of FY25, totaling ₹3.65 lakh crore (US$ 42.1 billion). The robust growth highlights India’s growing appeal as a global investment hub, driven by a proactive policy regime, a dynamic business climate, and increasing international competitiveness.
India's manufacturing sector is increasingly drawing global investor attention as shifting trade dynamics reshape the global landscape, according to S&P Global. With steady economic growth, efforts to diversify supply chains, and rising competitiveness, India is well-positioned to scale up its manufacturing capabilities, attract greater FDI, and grow its share in global exports.
Foreign Portfolio Investors (FPIs) also showed strong confidence in Indian equities, injecting ₹4,452.3 crore ($519.58 million) between May 13 and May 16, 2025, as per data from the National Securities Depository Limited (NSDL).
Tech giant Foxconn is committing ₹12,894 crore ($1.5 billion) to expand its operations in India, aligning with Apple’s strategy to shift a significant portion of its iPhone production from China to India. This move is aimed at reducing risks related to geopolitics and tariffs, and supports Apple’s broader goal of manufacturing most iPhones for the U.S. market within India.
Meanwhile, Databricks has announced plans to invest ₹2,133 crore ($250 million) in India through 2027. The company is also set to boost its workforce by over 50 percent, reaching 750 employees by the end of the financial year, with a focus on training, research and development, and market expansion efforts.
In its April 2025 bulletin, the Reserve Bank of India (RBI) noted that India stands to gain significantly from global supply chain shifts, a broader base of FDI sources, and heightened interest from international investors looking for scalable and resilient markets.
Government officials also revealed that India has received over 20 FDI inquiries in the last two months alone, following recent tariff measures by the United States. Companies across sectors such as chemicals, automobiles, textiles, and electronics are actively exploring investment and manufacturing opportunities in India.
In the Union Budget for 2025–26, the government has increased the sectoral cap for foreign investment in the insurance industry from 74 percent to 100 percent. Additionally, a new Investment Friendliness Index for states is set to be introduced this year to promote a more competitive investment climate. To further improve the ease of doing business, the government will also roll out Jan Vishwas 2.0.
