How Are Foreign Investors Capitalizing on India's FDI Surge?

New Delhi, June 5 (NationPress) India has successfully attracted over $500 billion in FDI equity inflows from 2014 to 2024, a significant increase compared to the $208 billion received during the previous decade, as reported by Sanjay Nayar, President of the prominent industry association Assocham.

Remarkably, $300 billion of this total was secured between 2019 and 2024, highlighting an accelerated growth pattern, he shared in a media piece.

This influx is largely due to transformative initiatives such as Make in India, Digital India, and the Production Linked Incentive (PLI) schemes, which have significantly improved the ease of doing business and positioned India as a center for clean technology and sustainable development, Nayar noted in The Economic Times.

The manufacturing and digital infrastructure sectors have experienced a revival over the past decade. Since 2014, the computer software and hardware sectors alone received $95 billion in FDI, while the services sector (covering finance, IT, R&D, and consultancy) attracted an additional $77 billion.

In 2014, between 75–80 percent of India's smartphones were imported. However, with the implementation of the PLI scheme, global giants like Apple, via Foxconn and Wistron, are now assembling iPhones in India, leading to a remarkable increase in smartphone exports to $21 billion.

Foreign investors are also aligning with India's green initiatives. From renewable energy to electric mobility, India is rapidly becoming a pivotal player in the global clean-tech value chain, stated Nayar.

India's FDI inflows rose to $81.04 billion in FY 2024-25, representing a 14 percent increase from $71.28 billion in FY 2023–24, according to a statement from the Ministry of Commerce and Industry last month.

Over the last 11 years, there has been a consistent increase in the annual FDI flow into the country, rising from $36.05 billion in FY 2013-14, driven by investor-friendly policies that allow for 100 percent FDI through the automatic route in most sectors.

The services sector emerged as the largest recipient of FDI equity in FY 2024–25, capturing 19 percent of total inflows, followed by computer software and hardware at 16 percent and trading at 8 percent. FDI in the services sector surged by 40.77 percent, reaching $9.35 billion from $6.64 billion the previous year.

India is also establishing itself as a manufacturing FDI hub, with an 18 percent growth in FY 2024–25, amounting to $19.04 billion, compared to $16.12 billion in FY 2023–24. Maharashtra accounted for the highest share at 39 percent of total FDI equity inflows in FY 2024–25, followed by Karnataka at 13 percent and Delhi at 12 percent.

Among the source countries, Singapore led with a 30 percent share, followed by Mauritius at 17 percent and the United States at 11 percent, according to data from the ministry.