India received record gross Foreign Direct Investment (FDI) inflows of $81.04 billion in 2024–25, marking a 14% increase, the government said on Monday citing provisional data. FDI equity inflows crossed $50 billion in the year, up 13% on year on the back of performance of the services sector.
However, in the fourth quarter of the last financial year (Q4), gross FDI dropped 24.5% to $ 9.34 billion.
The statement follows the Reserve Bank of India’s May Bulletin revealing that the country’s net FDI inflows plunged by 96% in 2024–25 to just $353 million from $10.1 billion in 2023-24. Net FDI is the difference between gross inflows and the sum of repatriation and outward FDI.
The drop in net FDI was caused by a rise in repatriation of profits by foreign companies in India, and a jump in outward investments by Indian companies. According to the RBI, repatriation and disinvestment rose to $51.5 billion in 2024-25, the highest in a decade. Simultaneously, Indian companies invested $29.2 billion abroad, a 75% surge on year. The central bank bulletin described this a “sign of a mature market” which allows foreign investors to enter and exit smoothly. However, among political circles, this created furore, with the opposition parties calling it a failure of the country to attract investments and even Indian companies preferring to re-locate.
According to a release by the Department for Promotion of Industry and Internal Trade (DPIIT), gross FDI in the services sector in 2024-25 grew 40.7% on year to $ 9.34 billion. FDI in non-conventional energy saw growth of 6.5% to $ 4.01 billion.
The services sector for the purpose of calculating FDI equity inflows includes financial, banking, insurance, outsourcing, research and development, courier, technology testing and and analysis.
“India is also becoming a hub for manufacturing FDI, which grew by 18% in FY 2024–25, reaching $ 19.04 billion compared to $16.12 billion in FY 2023–24,” the DPIIT claimed.
In absolute terms the computer software and hardware sector is the second biggest recipient of FDI in 2024-25 but it saw a decline of 2% to $ 7.81 billion.
In the telecom sector the FDI grew 164.5% on year in the last fiscal to $ 746 million. In trading the growth was 8.0% to $ 4.17 billion. The infrastructure construction sector was FDI inflows contracting by 46% to $ 2.24 billion. In development of townships and housing the foreign equity flows increased 135% to $ 529 million.
Singapore remained the biggest source of FDI in 2024-25. The flow of investment from Singapore was up 26.9% to $ 14.94 billion. It was followed by Mauritius with $ 8.34 billion, the US with $ 5.45 billion, Netherlands with $ 4,.62 billion. UAE $ 4.34 billion and Japan, with $ 2.47 billion. In total FDI in 2024-25 Singapore led with 30% share, followed by Mauritius (17%) and the United States (11%).
Maharashtra accounted for the highest share (39%) of total FDI equity inflows in FY 2024–25, followed by Karnataka (13%) and Delhi (12%).
“These trends reaffirm India’s position as a preferred global investment hub, enabled by a proactive policy framework, an evolving business ecosystem, and rising international confidence in India’s economic resilience,” the DPIIT statement added.
If the reinvested earnings and other forms of capital are added then the FDI in 2024-25 stood at $ 81.04 billion, a growth of 14% on year.
