May 28, 2025
The services sector attracted the highest FDI equity share at 19%, followed by computer software and hardware (16%) and trading
Manufacturing FDI surged by 18% year-on-year, reaching $19.04 billion in FY25
Maharashtra led among Indian states with 39% of total FDI inflows, followed by Karnataka (13%) and Delhi (12%)
Singapore was the top FDI source country, contributing 30%, ahead of Mauritius (17%) and the United States (11%)
India’s Foreign Direct Investment (FDI) inflows continued their upward trajectory, touching a provisional $81.04 billion in FY 2024–25, according to the Ministry of Commerce and Industry. This marks a 14% rise from $71.28 billion recorded in FY 2023–24, underscoring growing global confidence in the Indian economy.
The services sector emerged as the top destination for FDI equity, accounting for 19% of total inflows. It received $9.35 billion in FY25, a significant jump of 40.77% from $6.64 billion in the previous year. This was followed by the computer software and hardware sector, which attracted 16% of the inflows, while trading also featured prominently among the top sectors.
Manufacturing saw a robust rise in FDI, with inflows increasing 18% to reach $19.04 billion in FY25, up from $16.12 billion the previous year. This reflects a continued shift toward industrial and production-linked investments in India’s growth story.
Among Indian states, Maharashtra dominated with 39% of total FDI equity inflows, followed by Karnataka with 13% and Delhi at 12%. In terms of source countries, Singapore led the pack with a 30% share, while Mauritius and the United States followed at 17% and 11%, respectively.
The Ministry highlighted that between FY 2014 and FY 2025, India received $748.78 billion in FDI—an increase of 143% over the $308.38 billion received in the preceding 14 years. This 11-year span accounted for nearly 70% of the cumulative $1,072.36 billion in FDI that India has attracted over the past 25 years. Additionally, the number of countries investing in India rose from 89 in FY 2013–14 to 112 in FY 2024–25, suggesting broad-based international interest.
The government credited these gains to liberal reforms across multiple sectors. Between 2014 and 2019, FDI caps were raised in Defence, Insurance, and Pension sectors, while policies were eased in areas like Construction, Civil Aviation, and Single Brand Retail Trading. From 2019 to 2024, reforms continued with 100% FDI permitted under the automatic route in coal mining, contract manufacturing, and insurance intermediaries. In 2025, the Union Budget proposed extending this to insurance companies investing their entire premium within India, by raising the FDI limit from 74% to 100%.
Officials view these changes as a key part of India’s strategy to enhance its investment climate, deepen sectoral participation, and position itself as a global economic powerhouse.
Source: Economic Times