India achieved a significant milestone in the fiscal year 2024–25 by recording a provisional Foreign Direct Investment (FDI) inflow of $81.04 billion, marking a 14% increase from the previous year’s $71.28 billion. This represents the highest FDI inflow in the past three years, underscoring India’s growing appeal as a global investment destination.
Sectoral Highlights
- Services Sector: Attracted 19% of total FDI equity inflows, amounting to $9.35 billion, a 40.77% rise from the previous year’s $6.64 billion.
- Computer Software and Hardware: Accounted for 16% of the total FDI equity inflows.
- Trading Sector: Received 8% of the total FDI equity inflows.
- Manufacturing Sector: Saw an 18% increase in FDI, reaching $19.04 billion compared to $16.12 billion in the previous fiscal year.
Geographic Distribution
- Top Recipient States:
- Maharashtra: Received the highest share of FDI equity inflows at 39%.
- Karnataka: Accounted for 13% of the inflows.
- Delhi: Secured 12% of the total FDI equity inflows.
- Leading Source Countries:
- Singapore: Contributed 30% of the total FDI inflows.
- Mauritius: Accounted for 17%.
- United States: Provided 11% of the FDI inflows.
Policy Reforms and Investment Climate
The Indian government has implemented several investor-friendly policies to attract FDI, including:
- Allowing 100% FDI under the automatic route in sectors like coal mining, contract manufacturing, and insurance intermediaries.
- Proposing an increase in the FDI limit from 74% to 100% for insurance companies investing their entire premium within India.
These reforms have contributed to a steady rise in FDI inflows, from $36.05 billion in FY 2013–14 to $81.04 billion in FY 2024–25.
Quarterly Performance
Despite the annual growth, the January-March quarter of FY25 witnessed a 24.5% year-on-year decline in FDI equity inflows, totaling $9.34 billion compared to $12.38 billion in the same period the previous year.
Long-Term Trends
Over the past eleven financial years (2014–25), India attracted FDI worth $748.78 billion, reflecting a 143% increase over the previous eleven years (2003–14), which saw $308.38 billion in inflows. This constitutes nearly 70% of the total $1,072.36 billion in FDI received over the past 25 years. The Economic Times
Conclusion
India’s record FDI inflows in FY25 highlight the country’s robust economic fundamentals and the effectiveness of its policy reforms. The significant contributions from the services and manufacturing sectors, along with strategic investments from key global partners, underscore India’s position as a preferred destination for foreign investors.
