What Factors Contributed to India’s FDI Surge of 18% to $35.18 Billion in Q2 FY26?
Click to start listening
Synopsis
India's foreign direct investment (FDI) experienced a significant rebound in Q2 FY26, with a remarkable increase of 18%, reaching $35.18 billion. This surge is marked by notable contributions from the services sector and a doubling of inflows from the US, indicating strong global investor confidence. Maharashtra remains the top destination for FDI, showcasing India's attractiveness in the global market.
Key Takeaways
- FDI inflows rose by 18% to $35.18 billion.
- US investments more than doubled to $6.62 billion.
- Maharashtra is the leading state for FDI.
- Services sector contributed 16% to FDI.
- India's GDP growth surged to 8.2% in Q2 FY26.
New Delhi, Dec 1 (NationPress) India has demonstrated a remarkable increase in foreign direct investment (FDI) during the second quarter of the current financial year, with total inflows escalating by over 18% year-on-year to $35.18 billion for the period spanning April to September 2025, as per official statistics released on Monday.
In the same quarter the previous year, the country had drawn in $29.79 billion.
The surge in investments was notably more pronounced, exceeding 21% year-on-year to reach $16.54 billion in the June to September quarter alone. Out of this amount, FDI equity inflows made up over $16.5 million.
When examining contributions by sector, the services industry held the largest share, contributing 16% to FDI equity with inflows amounting to $5.09 billion. This sector encompasses various areas, including financial services, banking, insurance, business outsourcing, R&D, courier services, and technology testing and analysis.
A significant trend noted this fiscal year has been the dramatic increase in inflows from the United States, which more than doubled to $6.62 billion during the April to September period, indicating a renewed global investor confidence in the Indian market.
Maharashtra has maintained its position as the leading destination for foreign investment, capturing 31% of total FDI equity inflows at $10.57 billion.
Karnataka secured a 21% share, while Gujarat accounted for 15%, highlighting the preeminence of these states in attracting global capital.
Previously, India reported an impressive GDP growth rate of 8.2% in the second quarter (July to September) of the current financial year, up from 5.6% during the same quarter of FY 2024-25.
The secondary and tertiary sectors, demonstrating growth rates of 8.1% and 9.2% respectively, have contributed to the real GDP growth rate in Q2 of FY 2025-26 surpassing 8%, as stated in an official release.
In the secondary sector, the manufacturing sector exhibited a robust growth rate of 9.1%, while the construction segment expanded by 7.2% during the quarter.
Moreover, the growth rate in financial, real estate, and professional services within the tertiary sector surged to a double-digit 10.2% in Q2 of FY 2025-26.
Point of View
I affirm that these impressive figures reflect India's growing stature as an investment hub. The robust growth in FDI indicates a positive sentiment among global investors, reinforcing the need for continued policy support and infrastructure development to sustain this momentum.
NationPress
01/12/2025
Frequently Asked Questions
What is the total FDI inflow for India in Q2 FY26?
India's total foreign direct investment inflow for Q2 FY26 reached **$35.18 billion**, marking an **18% increase** year-on-year.
Which sector contributed the highest to FDI in India?
The **services sector** contributed the largest share of **16%** to FDI equity, totaling **$5.09 billion**.
How much did US investments in India increase?
Investments from the **United States** more than **doubled**, reaching **$6.62 billion** during April to September 2025.
Which state received the most FDI in India?
Maharashtra emerged as the top destination for foreign investment, accounting for **31%** of total FDI equity inflows.
What was India's GDP growth rate in Q2 FY26?
India reported a GDP growth rate of **8.2%** in the second quarter of the current financial year.
