With $81 billion in FDI, India strengthens its position as a global manufacturing and investment hub, driven by tech growth and strategic reforms.
India recorded a provisional foreign direct investment (FDI) inflow of US$81.04 billion in the financial year 2024–25, representing a 14 per cent rise from US$71.28 billion in the previous fiscal year. This is according to data released by the Ministry of Commerce and Industry on Tuesday, reflecting a consistent upward trend in FDI.
It has more than doubled from US$36.05 billion in FY 2013–14. The Ministry highlighted investor confidence in India’s liberal economic framework and expanding market potential.
The services sector attracted the largest share of FDI equity inflows in FY 2024–25, accounting for 19 per cent of the total, followed by the computer software and hardware sector with 16 per cent, and the trading sector with 8 per cent.
FDI into the services sector rose sharply by 40.77 per cent, reaching US$9.35 billion, up from US$6.64 billion the year before. Manufacturing FDI also saw a substantial increase of 18 per cent, totalling US$19.04 billion compared to US$16.12 billion in FY 2023–24, signalling India’s growing role as a manufacturing hub, particularly in electronics.
Major international companies are expanding their footprint in India’s electronics manufacturing space. As per recent developments, Apple’s supplier Foxconn has committed USD 1.5 billion for a new display module assembly plant near Chennai, expected to create 14,000 jobs. LG Electronics is investing USD 600 million in a new facility in Andhra Pradesh to ramp up domestic production.
These developments are bolstered by the government’s Production-Linked Incentive (PLI) scheme, which has encouraged over 300 mobile phone manufacturing units to set up operations in India, making the country the second-largest mobile phone producer globally.
Geographically, Maharashtra led all Indian states by attracting 39 per cent of total FDI equity inflows in FY 2024–25, followed by Karnataka at 13 per cent and Delhi at 12 per cent.
Singapore was the top source of FDI, contributing 30 per cent of the inflows, followed by Mauritius with 17 per cent and the United States with 11 per cent. The number of FDI source countries also increased significantly from 89 in FY 2013–14 to 112 in FY 2024–25, underscoring India’s broader global investment appeal.
Over the past eleven financial years, from 2014 to 2025, India attracted FDI worth US$748.78 billion, representing a 143 per cent increase over the US$308.38 billion received in the previous eleven years.
This cumulative figure now constitutes nearly 70 per cent of the US$1072.36 billion in total FDI received over the last 25 years, indicating a structural shift in India’s investment landscape.
Policy reforms have played a central role in this transformation. Between 2014 and 2019, the Indian government implemented sweeping liberalisation measures, including raising FDI caps in the defence, insurance, and pension sectors, and easing restrictions in civil aviation, construction, and single-brand retail.
From 2019 to 2024, reforms expanded to allow 100 per cent FDI under the automatic route in sectors such as coal mining, contract manufacturing, and insurance intermediaries. In 2025, the Union Budget further proposed increasing the FDI limit in insurance from 74 per cent to 100 per cent for companies that reinvest their entire premium income domestically.
Meanwhile, states like Assam and Uttar Pradesh are emerging as new electronics manufacturing centres. Assam is developing an OSAT (outsourced semiconductor assembly and test) facility in Jagiroad, expected to produce 48 million semiconductor chips daily by year-end. In Uttar Pradesh, the HCL-Foxconn joint venture is setting up a ₹37.06 billion semiconductor facility in Jewar, expected to become operational by 2027 and generate over 2000 jobs.
These developments highlight India’s growing importance in global supply chains, particularly in the electronics sector, driven by supportive policy, rising investor trust, and an expanding domestic market.
The combination of sustained FDI growth, regulatory reform, and industry-specific incentives positions India as a leading destination for global capital and high-tech manufacturing in the coming decade.
