Did FDI Inflow Surge by an Impressive 16% in the First Half of This Fiscal Year?

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Did FDI Inflow Surge by an Impressive 16% in the First Half of This Fiscal Year?

Synopsis

India's FDI inflow has achieved a historic milestone in the first half of FY 2025-26, with a remarkable 16% increase. This surge is backed by strategic free trade agreements and enhanced overseas investments, promising a robust economic future. Discover how these developments are shaping India's investment landscape.

Key Takeaways

  • FDI inflows for the first half of FY 2025-26 reached $50.36 billion.
  • 16% increase compared to the previous year.
  • Record inflows for the first half of a financial year.
  • Strategic free trade agreements are enhancing investment opportunities.
  • Ongoing negotiations with multiple countries for future FTAs.

New Delhi, Dec 2 (NationPress) The total foreign direct investment (FDI) inflow for the initial half of FY 2025-26, amounting to $50.36 billion, has experienced a remarkable growth of 16 percent in comparison to the same timeframe last year, which stood at $43.37 billion. This figure marks the highest recorded inflow for the first half of any financial year, as reported to Parliament on Tuesday.

According to the Minister of State for Commerce and Industry, Jitin Prasada, gross FDI inflows have surged from over $34 billion in 2012-13 to more than $80 billion in 2024-25.

Official statistics reveal that India has witnessed a strong resurgence in FDI during the second quarter of the current financial year, with total inflows surpassing 18 percent year-on-year, reaching $35.18 billion from April to September 2025.

Prasada elaborated that the recent trajectory in net FDI inflows can be attributed to heightened repatriation and disinvestment, along with increasing Overseas Direct Investment (ODI) outflows. The liberalized ODI regulations introduced in 2022 are empowering Indian companies to expand their business presence internationally, thereby enhancing their competitiveness in the global arena and contributing positively to the long-term strength of the Indian economy.

The rising trend in repatriation suggests that India is not just attracting foreign capital, but also providing substantial returns, reinforcing its status as a trustworthy investment hub, Prasada noted.

Furthermore, the government is capitalizing on free trade agreements to promote export diversification and attract investments. India has entered into 15 free trade agreements (FTAs) and 6 preferential trade agreements (PTAs) with its trade partners.

Prasada highlighted the significance of the Trade and Economic Partnership Agreement with the European Free Trade Association (EFTA), signed on March 10, 2024, which is described as a modern agreement. Notably, this agreement secures a unilateral binding commitment of $100 billion in investment and the creation of 1 million direct jobs over the next 15 years from Switzerland, Norway, Liechtenstein, and Iceland.

The government is actively collaborating with stakeholders to ensure that exporters can maximize the advantages of India's FTAs with key markets like Japan, Korea, and the UAE, while effectively leveraging the opportunities presented by recently concluded FTAs, including those with the EFTA countries and the UK.

Negotiations are underway for the early finalization of mutually beneficial FTAs with countries such as the EU, Peru, Chile, New Zealand, and Oman. The government is engaging with various stakeholders, including exporters, Export Promotion Councils (EPCs), industry associations, and state governments, to evaluate the evolving impact of US tariff measures.

Point of View

I recognize that these developments herald a promising phase for India’s economy. With significant growth in FDI inflows and active engagement in international trade agreements, the nation is poised for a transformative journey towards becoming a global business leader. It is essential to remain vigilant and support policies that enhance investor confidence and foster sustainable economic growth.
NationPress
02/12/2025

Frequently Asked Questions

What is the total FDI inflow for the first half of FY 2025-26?
The total FDI inflow for the first half of FY 2025-26 is $50.36 billion, representing a 16% increase from the previous year's $43.37 billion.
How does the current FDI inflow compare to previous years?
This FDI inflow is the highest ever recorded for the first half of any financial year.
What are the main factors contributing to the increase in FDI?
The increase in FDI is attributed to enhanced overseas investments, improved repatriation rates, and strategic free trade agreements.
What is the significance of the EFTA agreement?
The Trade and Economic Partnership Agreement with the EFTA secures a commitment of $100 billion in investment and aims to create 1 million direct jobs over the next 15 years.
Which countries is India negotiating FTAs with?
India is negotiating FTAs with the EU, Peru, Chile, New Zealand, and Oman, among others.
Nation Press