FDI inflows to India surge by 73% to $47 billion in 2025
The Indian economy has witnessed a significant surge in Foreign Direct Investment (FDI) inflows, with a staggering 73% increase to $47 billion in 2025, according to a report by the United Nations Trade and Development (UNCTAD). This remarkable growth is a testament to the country’s improving business environment, favorable investment policies, and the government’s efforts to attract foreign investment.
The UNCTAD report highlights that the increase in FDI inflows to India was driven by large investments in services such as finance and information technology (IT), as well as manufacturing. This is a significant development, as it indicates that foreign investors are confident in India’s growth potential and are willing to invest in key sectors that can drive economic growth and job creation.
The services sector, in particular, has been a major driver of FDI inflows to India. The country’s IT sector has been a significant attractor of foreign investment, with many global companies setting up operations in India to take advantage of the country’s skilled workforce and favorable business environment. The finance sector has also seen significant investment, with foreign investors pouring money into Indian banks, insurance companies, and other financial institutions.
Manufacturing has also been a key sector for FDI inflows to India, with foreign investors investing in industries such as automotive, pharmaceuticals, and textiles. The government’s “Make in India” initiative, launched in 2014, has been instrumental in promoting India as a manufacturing hub and attracting foreign investment in the sector.
In contrast, 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 is a significant development, as it indicates that foreign investors are becoming increasingly cautious about investing in the country due to concerns about the business environment and the government’s policies.
The surge in FDI inflows to India is a welcome development for the country’s economy, which has been facing challenges such as a slowing growth rate and a large trade deficit. The increase in foreign investment is expected to help boost economic growth, create jobs, and improve the country’s balance of payments.
The Indian government has been actively promoting foreign investment, with a range of policies and initiatives aimed at attracting foreign investors. These include the establishment of special economic zones (SEZs), the simplification of investment procedures, and the provision of incentives such as tax breaks and subsidies.
The government has also been actively promoting investment in key sectors such as infrastructure, renewable energy, and manufacturing. The “National Investment Promotion and Facilitation Agency” has been set up to facilitate foreign investment and provide a single window for investors to interact with the government.
The surge in FDI inflows to India is also a testament to the country’s improving business environment. India has been actively working to improve its ranking in the World Bank’s Ease of Doing Business index, which measures the ease of doing business in different countries. The country has made significant progress in recent years, with the World Bank ranking India 63rd out of 190 countries in its 2022 report, up from 77th in 2019.
In conclusion, the surge in FDI inflows to India is a significant development that highlights the country’s growing attractiveness as an investment destination. The increase in foreign investment is expected to help boost economic growth, create jobs, and improve the country’s balance of payments. The government’s efforts to promote foreign investment and improve the business environment have been instrumental in attracting foreign investors, and it is likely that India will continue to be a major destination for foreign investment in the coming years.
Source: https://www.ndtvprofit.com/economy/indias-fdi-inflows-surge-74-to-47-billion-un-data-10864485/amp/1
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