Gross FDI inflows jumps 18% in first eight months of FY24: Economic Survey 2025

India experienced a rebound in foreign direct investment (FDI) in the fiscal year 2025, with gross inflows increasing from $47.2 billion in the first eight months of FY24 to $55.6 billion during the same period in FY25, reflecting a 17.9 per cent year-on-year growth, as per the Economic Survey 2024-25.

In the long run, FDI inflows into India have surpassed $1 trillion between April 2000 and September 2024, further solidifying the nation's position as a key global investment destination.

As per the survey, which references the Department for Promotion of Industry and Internal Trade (DPIIT), total FDI inflows—including equity, reinvested earnings, and other capital—amounted to $1,033.4 billion during this period.

The survey emphasized that India should make every effort to attract FDI and enhance its appeal to investors.

“There is room to improve tax certainty and tax stability in matters such as APA (Advance Pricing Agreement). India has simplified many of its laws, rules and regulations over the years leading to a regime shift in terms of the ease of doing business compared to yester years,” the survey said.

According to the survey, the services sector continues to be the largest recipient of foreign direct investment (FDI), accounting for 19.1% of total equity inflows in the first half of FY25. Other key sectors attracting significant foreign investments include computer software and hardware (14.1%), trading (9.1%), non-conventional energy (7%), and cement and gypsum products (6.1%).

What's behind Gross FDI inflows rally?

Despite short-term global market fluctuations driven by inflation, rising interest rates, and geopolitical tensions, the survey noted that India's long-term FDI outlook remains positive, supported by strong economic fundamentals and ongoing structural reforms.

While concerns have been raised over recent FDI inflows due to a perceived decline, global factors such as economic uncertainty and higher borrowing costs have influenced investment flows.

Despite an increase in gross FDI in FY25, repatriations have also risen as global firms capitalize on their investments. Many multinational companies have taken advantage of India’s strong stock market through secondary sales and IPOs, highlighting investor confidence.

Between January and September 2024, private equity and venture capital exits from Indian stock markets totaled $19.5 billion, up from $18.3 billion in the previous year.

While India continues to rank high in greenfield project announcements and international project finance deals, net FDI for the first eight months of FY25 stood at just $0.48 billion, a sharp decline from $8.5 billion in the same period of FY24. Additionally, repatriations have surged, reaching $39.6 billion by November 2024, signaling a trend of foreign investors realizing profits.

Although these developments showcase achievements in foreign investment, they also underscore the importance of monitoring net inflows as India navigates the complexities of global investment trends.