India has transformed from a cautious reformer to a global investment magnet, rewriting the rules of foreign direct investment (FDI).
Since 2014, the country has attracted over $500 billion in FDI equity inflows—more than double the $208 billion it received from 2004 to 2014.
Between 2019 and 2024 alone, India drew $300 billion. In just nine months of FY 2024–25, FDI in India stood at $40.67 billion, showing unwavering investor confidence despite global economic slowdowns.
Reforms such as Make in India, Startup India, Digital India, and the rollout of GST have played a crucial role.
The focus on ‘Minimum Government, Maximum Governance’ improved the ease of doing business.
India’s global ranking jumped from over 140 in 2014 to 63 in 2019, reflecting this transformation.
Manufacturing & Digital Economy Drive Growth
India’s digital sector led the surge, with $95 billion in FDI in software and hardware since 2014.
Services like finance, R&D, and consultancy drew another $77 billion. But manufacturing has become the game-changer.
With the Production Linked Incentive (PLI) scheme, India flipped smartphone import dependency. Now, iPhones are assembled domestically, and smartphone exports have hit $21 billion, up from negligible levels a decade ago.
FDI in auto, construction equipment, and pharmaceuticals is fuelling broad-based industrial growth.
Each dollar invested means job creation, MSME expansion, and technology transfers, especially in Tier 2 and Tier 3 cities.
Green Ambitions & Regional Shifts Boost Investment
Foreign investors are also supporting India’s clean energy goals.
Tesla, Hyundai, Adani Green, and ReNew Power are investing in renewables and electric mobility. Green FDI now powers India’s sustainable future.
While Maharashtra, Tamil Nadu, and Gujarat lead in attracting investment, Uttar Pradesh, Telangana, and Haryana are rising through infrastructure upgrades and policy reforms.
With FTAs like the India-UAE CEPA and India-Australia ECTA, India is entering new sectors like green hydrogen and EVs.
As global firms move away from China under the ‘China Plus One’ strategy, FDI in India reflects its growing stature as a scalable, democratic alternative.
India is no longer just a contender, it is becoming the centre of global value chains.
Also Read: India’s Services Sector Expands Strongly In May; Job Creation Hits Record High
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