India crosses $1 tn cumulative FDI milestone, inflows jump 26% in H1 FY25
- Nearly 69% of the total FDI inflows over the past 24 years were recorded in the last decade, amounting to $709.84 billion, according to DPIIT data.
New Delhi: India has crossed a milestone of $1 trillion in cumulative foreign direct investment (FDI) inflows since April 2000, underscoring the nation’s growing appeal as a global investment hub.
In the first half of the fiscal year 2024-25, FDI inflows surged by 26% to reach $42.1 billion, reflecting the impact of investor-friendly reforms and a dynamic business environment, the ministry of commerce & industry said in a statement on Thursday.
According to data from the Department for Promotion of Industry and Internal Trade (DPIIT), nearly 69% of the total FDI inflows over the past 24 years were recorded in the last decade (April 2014 to September 2024), amounting to $709.84 billion.
“This trend highlights India’s strategic position in the global economic landscape, bolstered by transformative policy initiatives such as "Make in India" and the Goods and Services Tax (GST),” the ministry said in the statement.
As per the DPIIT data, about 25% of the FDI came through the Mauritius route, followed by Singapore (24%), the US (10%), the Netherlands (7%), Japan (6%), the UK (5%), UAE (3%). Cayman Islands, Germany and Cyprus accounted for 2% each.
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Sectoral distribution
During FY2023-24, the services sector, encompassing finance, banking, insurance, outsourcing, R&D, and technology testing, emerged as the leading recipient of FDI equity inflows, accounting for 16% of the total, the DPIIT data showed. It was closely followed by computer software and hardware at 15%, trading at 6%, telecommunications also at 6%, and the automobile industry at 5%, as per the data.
In terms of regional distribution, Maharashtra led the states with 30% of the FDI equity inflow, followed by Karnataka at 22%, Gujarat at 17%, Delhi at 13%, and Tamil Nadu at 5%, it said.
India’s rising global competitiveness has been reflected in its improved rankings. In the 2024 World Competitiveness Index, India secured 40th position, up from 43rd in 2021. Similarly, it climbed from 81st in 2015 to 40th in the 2023 Global Innovation Index.
As the third-largest recipient of greenfield project announcements in 2023, India saw 1,008 projects initiated. It also ranked second globally in international project finance deals, with a 64% rise in such transactions, it said citing the World Investment Report.
India also improved its business environment, advancing from 142nd in 2014 to 63rd in the World Bank’s Doing Business Report (DBR) 2020, released in October 2019 before the report was discontinued, it said.
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As things stand, India’s FDI framework allows 100% foreign ownership in most sectors under the automatic route, with a few exceptions for strategic industries. Recent amendments to the Income Tax Act, such as abolishing the angel tax and reducing tax rates for foreign companies, have helped in attracting FDIs. The government has also opened up emerging sectors like space and defence for greater foreign investment.
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Business NewsEconomyIndia crosses $1 tn cumulative FDI milestone, inflows jump 26% in H1 FY25
First Published:12 Dec 2024, 08:54 PM IST
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