FDI inflows to India surge by 73% to $47 billion in 2025
The Indian economy has witnessed a significant boost in Foreign Direct Investment (FDI) inflows, with a staggering 73% increase to $47 billion in 2025, according to a report by the United Nations Conference on Trade and Development (UNCTAD). This surge in FDI inflows is a testament to the country’s growing attractiveness as a destination for foreign investors, driven by large investments in services such as finance and IT, as well as manufacturing.
The report highlights that the increase in FDI inflows to India was largely driven by the government’s efforts to improve the business environment, simplify regulatory frameworks, and introduce policies that encourage foreign investment. The ‘Make in India’ initiative, launched by the government in 2014, has been instrumental in promoting India as a manufacturing hub, attracting significant investments from foreign companies.
The services sector, including finance and IT, has been a major recipient of FDI inflows, with many global companies setting up operations in India to take advantage of the country’s skilled workforce and favorable business environment. The IT sector, in particular, has been a significant contributor to FDI inflows, with many global IT companies investing heavily in India to tap into the country’s vast talent pool.
On the other hand, FDI inflows to China declined for the third consecutive year, falling by 8% in 2025. This decline is attributed to a combination of factors, including a slowing economy, rising labor costs, and increasing competition from other emerging markets. The decline in FDI inflows to China has created opportunities for other countries, including India, to attract foreign investment and emerge as a preferred destination for global companies.
The surge in FDI inflows to India is expected to have a positive impact on the country’s economy, with the potential to create new jobs, stimulate economic growth, and increase competitiveness. The government’s efforts to improve the business environment and promote foreign investment are likely to continue, with a focus on attracting more FDI inflows in the coming years.
The report by UNCTAD also highlights the importance of FDI in promoting economic growth and development. FDI can bring in new technologies, management practices, and skills, which can help to improve productivity and competitiveness in the domestic economy. Additionally, FDI can provide access to new markets, helping domestic companies to expand their reach and increase their exports.
In recent years, the Indian government has implemented several policies to attract FDI, including the introduction of a new FDI policy, which allows for 100% FDI in many sectors, including manufacturing, construction, and services. The government has also established several investment promotion agencies, including Invest India, to promote India as a destination for foreign investment.
The surge in FDI inflows to India is also expected to have a positive impact on the country’s balance of payments. FDI inflows can help to finance the country’s trade deficit, reducing the reliance on external debt and promoting stability in the foreign exchange market.
In conclusion, the 73% surge in FDI inflows to India in 2025 is a significant development, highlighting the country’s growing attractiveness as a destination for foreign investment. The increase in FDI inflows is driven by large investments in services such as finance and IT, as well as manufacturing, and is expected to have a positive impact on the country’s economy. The government’s efforts to improve the business environment and promote foreign investment are likely to continue, with a focus on attracting more FDI inflows in the coming years.
As the Indian economy continues to grow and develop, it is likely to attract more foreign investment, driven by the country’s large and growing market, skilled workforce, and favorable business environment. The surge in FDI inflows is a testament to the country’s potential as a destination for foreign investment, and is expected to play a significant role in promoting economic growth and development in the years to come.
News Source: https://www.ndtvprofit.com/economy/indias-fdi-inflows-surge-74-to-47-billion-un-data-10864485/amp/1
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