India Attracted USD 39 Bn FDI Inflows In 2025, Up 44%: UN Report

New Delhi, Jul 8 (KNN) Foreign direct investment (FDI) inflows to India increased by 44 per cent in 2025 to USD 39 billion, with the country continuing to strengthen its position as a major investment destination, according to the 2026 World Investment Report released by United Nations Trade and Development (UNCTAD) on Tuesday.

The report said global FDI showed resilience in 2025, though the recovery remained fragile, with flows rising 6 per cent to USD 1.6 trillion — up 11 per cent in developed economies and 2 per cent in developing economies. 

Excluding conduit flows through major European financial centres, global FDI rose 4 per cent after two consecutive years of decline, with the outlook for 2026 facing significant downside risks from trade policy uncertainty, geopolitical tensions and conflicts, it noted.

South Asia and India

FDI inflows to South Asia rose from USD 34 billion to USD 46 billion, driven largely by investment in India. 

However, the report highlighted that while total inflows rose, project indicators pointed to a more cautious investment cycle: the total value of announced greenfield investment in India declined from more than USD 111 billion in 2024 to about USD 74 billion in 2025, while the number of projects fell marginally.

The report said India reinforced its standing as a major investment destination in 2025 through a proactive policy push to diversify beyond services and scale up advanced manufacturing, backed by flagship initiatives such as the Production-Linked Incentive (PLI) Scheme, Make in India and the National Industrial Corridor Development Programme (NICDP), alongside reforms including the National Single Window System (NSWS) and the India Industrial Land Bank.

Manufacturing Slowdown

The slowdown in announced investment was concentrated in manufacturing, where values fell from about USD 65 billion in 2024 to USD 27 billion in 2025, most visibly in capital-intensive sectors. 

The report noted that in many cases project numbers declined only moderately, suggesting smaller project sizes rather than fewer commitments, with electronics-related manufacturing remaining one of the largest manufacturing segments by value and project count despite the year-on-year decline.

Investment in services, by contrast, remained resilient and broadly stable, exceeding manufacturing investment, with information and communication technologies emerging as the largest sector in 2025 amid continued expansion in digital infrastructure and technology-related activities. Financial services also recorded renewed activity.

Outlook

The report said India's policy framework remains oriented towards advanced manufacturing, infrastructure development and deeper integration into global value chains, but noted that tariff uncertainty, supply chain realignment and weaker global investment sentiment are affecting the scale of new manufacturing and infrastructure commitments. 

It added that manufacturing remains central to FDI in developing Asia, particularly in electronics, automotive and machinery, even as investment shifts towards high-technology and digital economy sectors, with digital infrastructure expansion supported by hyperscale data centre investments from Amazon, Google and Microsoft, particularly in India, Malaysia and Indonesia.

(KNN Bureau)