India's foreign direct investment (FDI) inflows surged 44% to $39 billion in 2025, consolidating the country's position as a top global investment destination, according to the United Nations Trade and Development (UNCTAD) in its 2026 World Investment Report released on Tuesday.
FDI Inflows Surge Amid Fragile Global Recovery
Worldwide FDI flows increased 6% to $1.6 trillion in 2025, with developed economies recording an 11% rise and developing economies seeing a 2% increase. South Asia witnessed a sharp rise in FDI inflows, climbing from $34 billion to $46 billion, largely driven by India, according to UNCTAD. The report noted that while overall inflows increased, project-related indicators suggested a more cautious investment environment.
The Indian government's active policy framework—including the Production-Linked Incentive (PLI) schemes, Make in India, Start-up India, and the National Industrial Corridor Development Programme—was cited as a key driver. UNCTAD highlighted that India's liberalised FDI regime and institutional mechanisms such as project development cells and the Project Monitoring Group have enhanced investor attractiveness by speeding up approvals.
| Indicator | 2024 | 2025 | Change |
|---|---|---|---|
| FDI inflows (India) | ~$27 billion (est.) | $39 billion | +44% |
| Announced greenfield investments (India) | $111 billion | $74 billion | -33% |
| Manufacturing greenfield investments (India) | $65 billion | $27 billion | -58% |
Greenfield Investments Moderate as Momentum Cools
Despite the FDI inflow jump, announced greenfield investments in India declined to around $74 billion in 2025 from more than $111 billion in the previous year, and the number of announced projects also edged lower. The moderation was concentrated in manufacturing, where the value of announced investments fell from approximately $65 billion to $27 billion, with capital-intensive industries seeing the sharpest declines.
"In many cases, the number of announced projects fell only slightly, indicating that projects were generally smaller in size rather than reflecting a significant reduction in investment commitments," the report noted.
Electronics manufacturing continued to rank among the largest manufacturing segments in terms of both investment value and project count, even as it moderated from elevated 2024 levels. UNCTAD observed that this momentum moderation in 2025 occurred amid a more uncertain global economic backdrop.
Policy Framework Driving Manufacturing Growth
India's policy measures have helped strengthen investment momentum, particularly in manufacturing. Announced greenfield investments in the sector rose sharply between 2021 and 2024, reflecting India's expanding role in selected global value chains, including electronics manufacturing. The report emphasised that India continued to roll out policies to attract investment into priority sectors such as electronics, semiconductors, and allied manufacturing.
For executives and investors tracking corporate strategy, the dual trend of rising FDI inflows and moderating greenfield projects signals that while India remains an attractive destination for capital, global uncertainty is prompting more cautious project size and phasing. The shift toward smaller, more frequent projects may benefit companies with flexible manufacturing capabilities.
Next Milestone
UNCTAD's report did not specify an update date. However, investors and policymakers will watch subsequent quarterly FDI data releases from India's Department for Promotion of Industry and Internal Trade (DPIIT) for sustained momentum.
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