India is accelerating the process of reporting foreign investment, with the government releasing a set of bold reforms and policy initiatives to propel average annual foreign investment inflows over the $100 billion mark. The move follows the country getting a record $81.04 billion of foreign direct investment (FDI) in FY 2024–25—a 14% year-on-year rise and the highest in three years.
Key Highlights
FDI Inflow Record: India attracted $81.04 billion in FDI during FY 2024–25, a higher figure than last year's $71.28 billion, on account of robust performance in services, manufacturing, and technology sectors.
Sectoral Leaders: Sectoral leaders were the services sector with a total of $9.35 billion (19% of all inflows), trailed by computer software and hardware (16%), and trading (8%). Manufacturing FDI increased 18% to $19.04 billion.
Leading Destinations: Maharashtra drew the biggest percentage (39%), followed by Karnataka (13%) and Delhi (12%), reflecting better infrastructure and business situations in these states.
Major Source Countries: The largest investor was Singapore (30%), followed by Mauritius (17%) and the US (11%).
Policy Reforms:
The government relaxed FDI limits for strategic industries—insurance (up to 100%), defence, telecom, and coal mining.
The $26 billion Production Linked Incentive (PLI) scheme continues to drive manufacturing and exports, and pull in foreign investors.
Regulatory reforms consist of simplified compliance, de-criminalization of business regulations, and the upcoming Investment Friendliness Index to entice competition on a state level.
SEBI relaxed rules to encourage foreign portfolio investment, especially in the lead-up to India's inclusion in major international bond indices.
Future Outlook: The government's particular target is to continue to consistently surpass $100 billion in a year of FDI, thanks to ongoing reforms, increased ease of doing business, and a strong macroeconomic setting.
"India's improving local fundamentals and long-term economic prospects position it well to attract sustained FPI inflows, should global conditions normalize." — Vipul Bhowar, Waterfield Advisors
With a transparent, investor-friendly policy environment and forward-looking regulatory actions, India is rapidly developing into a world investment destination and has the potential to achieve the $100 billion per annum FDI in the near term.
Source: Press Information Bureau, News9, Times of India, India Briefing, Business Standard, SEBI, and Ministry of Commerce.
