.png)
India sees 143% surge in FDI inflow in 11 years
- 8Bit Market
- Jun 10
- 3 min read
SUMMARY
In 2024-25, Singapore became the largest source of FDI for India, contributing $14.94 billion in inflows. It was followed by Mauritius, the US, the Netherlands, the UAE, Japan, Cyprus, the UK, Germany, and the Cayman Islands.
Foreign Direct Investment (FDI) is a critical driver of economic growth, and India has seen significant progress in attracting FDI over the past decade. According to Commerce and Industry Minister Piyush Goyal, India has experienced a 143% surge in FDI inflows from 2014 to 2025, with no declining trend despite global economic fluctuations. This report summarizes key insights from recent data and statements regarding India’s FDI performance, highlighting growth, sectoral trends, and contributing factors.
Key Findings:
1.FDI Growth (2014–2025)
Over the 11 financial years from 2014 to 2025, India attracted a cumulative FDI of USD 748.78 billion, a 143% increase compared to USD 308.38 billion in the previous 11 years (2003–2014).
In FY 2024–25 alone, gross FDI inflows reached USD 81.04 billion, reflecting a 14% year-on-year increase from USD 71.3 billion in FY 2023–24.
Despite a sharp 96% drop in net FDI to USD 0.4 billion in FY25 due to high repatriation (USD 51.5 billion) and outward investments by Indian companies (USD 29.2 billion), gross inflows remain robust.
2.Global Investor Confidence
India now attracts FDI from 112 countries, up from 89 in FY 2013–14, underscoring its growing global appeal.
Singapore emerged as the largest FDI source in FY 2024–25, contributing USD 14.94 billion, followed by Mauritius, the UAE, the Netherlands, and the US, which together accounted for over 75% of inflows.
3.Sectoral Distribution
Key sectors driving FDI inflows include:
Services: Up 40% in FY25, with significant growth in financial services.
Manufacturing: Contributes over 60% of inflows, alongside energy and communication services.
Telecommunications: FDI grew 164.5% to USD 746 million in FY25.
Trading: Increased by 8% to USD 4.17 billion.
Non-conventional energy, automobiles, chemicals, and construction development also saw notable inflows, though infrastructure construction contracted by 46% to USD 2.24 billion.
4.Government Initiatives and Outlook
Minister Goyal emphasized India’s openness to suggestions and new measures to promote FDI, reinforcing a proactive stance to sustain inflows.
India’s economic reforms and strong growth outlook position it as a top global investment hub, with Goyal projecting it as the fastest-growing economy for the next 30 years.
Ongoing trade negotiations, including a potential India-US bilateral trade agreement and a comprehensive free trade agreement with the EU by December 2025, are expected to further boost FDI.
5.Challenges and Criticisms
The 96% plunge in net FDI in FY25, driven by profit repatriation and outward investments, has raised concerns about investment uncertainty.
Experts attribute this to a maturing investment cycle, with foreign companies withdrawing profits and Indian firms investing abroad to capitalize on global supply chain shifts.
Despite the net FDI drop, experts view the 13.7% rise in gross inflows as a positive sign of economic maturity.
Chart: FDI Inflows Comparison (2003–2014 vs. 2014–2025):
Conclusion
India’s 143% surge in FDI inflows over the past 11 years reflects its growing attractiveness as an investment destination, driven by economic reforms, sectoral diversity, and global confidence. While gross FDI inflows reached a record USD 81.04 billion in FY25, the sharp decline in net FDI highlights challenges like repatriation and outward investments. The government’s proactive measures and ongoing trade negotiations signal a commitment to sustaining and enhancing FDI growth. Policymakers must address repatriation trends and domestic investment constraints to maintain India’s trajectory as a global investment hub.
Comments