India clocks record $81 Billion in FDI inflows in FY25

May 28, 2025 | 0 Comment

India received its highest-ever gross Foreign Direct Investment (FDI) inflows of $81.04 billion in 2024–25 — a 14% year-on-year increase — signaling strong global trust in the country’s economic potential. This growth was driven by robust investments in the services, manufacturing, and renewable energy sectors, supported by evolving policy frameworks and an expanding business ecosystem.

FDI_TPCI

India recorded gross Foreign Direct Investment (FDI) inflows of $81.04 billion in 2024–25, a 14% year-on-year increase, according to provisional data from the government. FDI equity inflows crossed $50 billion, up 13% compared to the previous year, largely due to the strong performance of the services sector, which saw a 40.7% rise to $9.34 billion.

Despite the overall growth, gross FDI dropped 24.5% in Q4 to $9.34 billion. More significantly, net FDI inflows plunged by 96% to just $353 million, down from $10.1 billion in 2023–24, as per the Reserve Bank of India. This sharp decline was caused by a surge in repatriation of profits and outward investments. Repatriation and disinvestment hit $51.5 billion, the highest in a decade, while Indian companies invested $29.2 billion abroad, up 75%. The RBI described this as a “sign of a mature market,” though opposition parties criticized it, suggesting declining investor confidence.

FDI in non-conventional energy grew 6.5% to $4.01 billion, while manufacturing FDI increased 18%, reaching $19.04 billion from $16.12 billion the previous year. The computer software and hardware sector, despite being the second-largest FDI recipient, saw a 2% decline to $7.81 billion.

Other sectoral highlights include a 164.5% rise in telecom FDI to $746 million, 8% growth in trading to $4.17 billion, a 46% drop in infrastructure construction to $2.24 billion, and a 135% increase in housing and township development to $529 million.

Singapore remained the top FDI source, contributing $14.94 billion (30%), followed by Mauritius ($8.34 billion), US ($5.45 billion), Netherlands ($4.62 billion), UAE ($4.34 billion), and Japan ($2.47 billion).

At the state level, Maharashtra attracted the most FDI equity (39%), followed by Karnataka (13%) and Delhi (12%). The DPIIT emphasized that these trends reinforce India’s status as a preferred global investment hub due to proactive policies and investor confidence.

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