Foreign Direct Investment (FDI) in India reached a new high in fiscal year 2024-25. According to recently released data from the Ministry of Commerce and Industry, FDI in India increased by 14 percent, reaching $81.04 billion. This compares to $71.28 billion in the previous fiscal year (2023-24). This rapid growth demonstrates India's increasing appeal and reliability as a market for foreign investors.
Dominance of FDI in the Service Sector
The service sector contributed the most to FDI in India, accounting for approximately 19 percent of the total. This sector encompasses various fields, including financial services, wholesale trading, education, and healthcare. The computer software and hardware sector followed, contributing 16 percent of the total investment. The trade sector also saw significant FDI, accounting for 8 percent of the total investment. These figures indicate that India's service sector and technology-based industries are attracting significant foreign investment.
Increased Investment in the Manufacturing Sector
Foreign investment in the manufacturing sector also witnessed significant growth. Investment rose from $16.12 billion in fiscal year 2023-24 to $19.04 billion in fiscal year 2024-25, representing an approximate 18 percent increase. This surge in manufacturing investment indicates India's accelerating progress towards becoming a manufacturing hub. Government-friendly policies and initiatives like "Make in India" are making the sector increasingly attractive to investors.
Consistent FDI Growth Over the Past 11 Years
The Ministry of Commerce and Industry's statement also highlighted the consistent growth of FDI in India over the past 11 years. FDI, which stood at only $36.05 billion in fiscal year 2013-14, has now reached $81 billion. This growth is attributed to several investor-friendly policies, including allowing up to 100 percent foreign investment in various sectors. These policies have strengthened India's economic foundation and boosted investor confidence.
State-wise FDI Investment
In fiscal year 2024-25, Maharashtra received the highest FDI, accounting for 39 percent of the total. Karnataka followed with 13 percent, and Delhi with 12 percent. Maharashtra's robust economy and Mumbai's business environment remain major draws for foreign investment. Karnataka and Delhi also attract investors due to their thriving technology and service sectors.
Origin of Foreign Investment
Singapore was the leading source of FDI, contributing 30 percent of the total inflow into India. Mauritius accounted for 17 percent, while the United States contributed 11 percent. This demonstrates the equal participation of Asian and Western countries in India's investment attraction.
