The Business Bytes
THEBUSINESSBYTES BUREAU
NEW DELHI, MAY 27, 2025
India witnessed a significant upswing in foreign direct investment (FDI) inflows during the financial year 2024–25, reaching an all-time high of $81.04 billion, a 14% increase from $71.28 billion recorded in FY 2023–24. The Ministry of Commerce and Industry, in a statement released on Tuesday, attributed the growth to sustained investor confidence, a liberalised policy environment, and the country’s rising prominence as a global investment hub.
The ministry highlighted that FDI inflows have seen a consistent rise over the past 11 years, climbing from $36.05 billion in FY 2013–14. This trend, it noted, is the result of investor-friendly policies that allow 100% FDI through the automatic route in most sectors. The total FDI received by India over the last 11 financial years (2014–25) stood at $748.78 billion — reflecting a 143% surge compared to the $308.38 billion received in the previous 11 years (2003–14). In total, this accounts for nearly 70% of the $1,072.36 billion FDI inflow that India has seen in the past 25 years.
The services sector emerged as the leading recipient of FDI equity in FY 2024–25, accounting for 19% of total inflows. Investments into this sector rose sharply by 40.77% to $9.35 billion from $6.64 billion in the previous fiscal year. Computer software and hardware followed closely, attracting 16% of total FDI, while the trading sector received 8%. Notably, the manufacturing sector continued to draw increasing attention, with FDI inflows rising by 18% to reach $19.04 billion in FY 2024–25, compared to $16.12 billion in the previous year — underscoring India’s growing role as a global manufacturing base.
Maharashtra retained its position as the top state for attracting FDI equity, accounting for 39% of total inflows. Karnataka followed with a 13% share, while Delhi secured 12%, collectively making up the majority of the country’s FDI destinations. On the global front, Singapore emerged as the leading source of FDI into India, contributing 30% of the total, followed by Mauritius (17%) and the United States (11%).
The government underscored that the increase in FDI was also reflective of India’s growing global appeal, with the number of source countries rising from 89 in FY 2013–14 to 112 in FY 2024–25. This broader investor base demonstrates India’s evolving image as a preferred investment destination amid global economic shifts.
The statement also detailed several reforms undertaken over the years to liberalise the FDI regime. Between 2014 and 2019, the government raised FDI caps in key sectors such as defence, insurance, and pensions, and eased norms in areas like civil aviation, construction, and retail. From 2019 to 2024, reforms continued with the introduction of 100% FDI under the automatic route in coal mining, contract manufacturing, and insurance intermediaries. In 2025, a major proposal was introduced in the Union Budget to allow 100% FDI for companies that reinvest their entire premium income within India — further boosting capital availability for key sectors.
